Explicando la brecha entre el salario real y la productividad laboral en la República Dominicana: Análisis macroeconómico y recomendaciones de políticas basadas en microsimulaciones

Explaining the Gap Between Real Earnings and Labor Productivity in the Dominican Republic: Macroeconomic Analysis and Policy Recommendations based on Microsimulations

Miguel Jiménez Polanco and Nabil López Hawa

MPRA Paper from University Library of Munich, Germany

Abstract: This paper addresses the determinants and causes of the gap between real earnings and labor productivity in the Dominican Republic, using data from the National Labor Force Survey. Our estimates indicate that the main determinants of the gap between real earnings and labor productivity are the bargaining power of workers, the downward pressure the Dominican Republic receives from lower-wages exporting countries, and the level of education of the working population. Likewise, in order to evaluate possible solutions to close the real earnings-labor productivity gap, we run micro-simulations, in order to evaluate the impact of four specific public policies would have on real earnings: firstly, an increasing the formality rate of employment; secondly, an increase the bargaining power of employees; thirdly, an increase of higher education; and finally, an increase of vocational education in the working population. Our results suggest that increasing both the scope of higher education and vocational education, as well as increasing the bargaining power of the working population, would translate into gains in terms of real wages that would help to close the gap between real earnings and labor productivity.

Keywords: Labor productivity; real earnings; labor markets; simulations; bargain power; education; Dominican Republic (search for similar items in EconPapers)
JEL-codes: E24 J08 J24 J30 (search for similar items in EconPapers)
Date: 2017-07-30
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (1)

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