Recent Changes in Wage Inequality in Argentina. The Role of Labor Formalization and Other Factors

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 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.

For a Future of Work with Dignity: A Critique of the World Bank Development Report, The Changing Nature of Work

“…In the case of Brazil (prior to the recent change in government), the stabilising of inequality was the result of government policies and institutions. Notably, the Lula government implemented an aggressive programme of transfers to the poorest segments of society, while supporting the process of labour formalisation, raising the minimum wage on a regular basis; in a context where trade unions remain among the strongest in the region, they were increasingly able to negotiate wage increases above the inflation rate (Anner and Veiga, 2013;Beccaria, Maurizio and Vazquez, 2014;Maurizio, 2014). During this same period, the government significantly enhanced the labour inspection system through considerable investments which resulted in increased number of workplaces being inspected for labour rights violations (Gindling, Mossaad and Trejos, 2013;Rani, Belser, Oelz and Ranjbar, 2013).…”

Impactos distributivos del salario mínimo en América Latina. Los casos de la Argentina, Brasil, Chile y Uruguay

“…Desigualdad salarial y salario mínimo: un panorama descriptivo Evolución de la desigualdad del salario horario La desigualdad de los ingresos continúa siendo una característica relevante de América Latina. Sin embargo, durante la década de 2000 varios países de la región han exhibido tendencias positivas (Beccaria, Maurizio y Vázquez, 2014;CEPAL, 2014;Keifman y Maurizio, 2014;López Calva y Lustig, 2010), que contrastan fuertemente con aquellas evidenciadas en la década de los noventa y también con las que se registran actualmente en otras regiones del mundo, como, por ejemplo, en Asia (BAD, 2012).…”

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“…La literatura para la Argentina señala, por un lado, resalta la importancia del proceso formalizador y su impacto en la distribución salarial (Beccaria, Maurizio y Vázquez, 2014). Sin embargo, también se halla especial énfasis en la reducción en los retornos educativos y el estrechamiento en los ingresos del trabajo (Gasparini y Cruces, 2008).…”