Recent changes in wage inequality in Argentina. The role of labor formalization and other factors

Beccaria Luis, Roxana Maurizio and Gustavo Vazquez

MPRA Paper from University Library of Munich, Germany

Abstract: In the last decade Argentina experienced a process of wage inequality reduction that is in stark contrast with the trends of the previous decade. The purpose of this study is to analyze the contribution of different factors to this process. The method employed is a decomposition proposed by Firpo, Fortin and Lemieux (2007, 2011), which allows extending the Oaxaca-Blinder approach to decompose some distributive statistics of income between a ‘composition effect’ and a ‘returns effect’. Similar to other studies, the results reveal that declining returns to education have been a major factor explaining the improvement in the distribution of income observed in the 2003-2012 period. However, the process of labor formalization has also had an equalizing effect over the period.

Keywords: Inequality; labor formalization; Oaxaca-Blinder; decomposition methods. (search for similar items in EconPapers)
JEL-codes: D31 J31 (search for similar items in EconPapers)
Date: 2014-06-17
New Economics Papers: this item is included in nep-iue and nep-lam
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