Recent decline in wage inequality and formalization of the labour market in Argentina

Abstract

Labour market conditions improved during the 2000s in Latin America, a process that included a reduction in the magnitude of informal employment. A decline of wage inequality was another feature of this period. Both dynamics were particularly intense in Argentina. The purpose of this study is to evaluate the role played by the process of formalization of the labour market that occurred in Argentina during that period on the reduction of income inequality, while additionally taking into account other factors that might have also contributed to such dynamics of income inequality. The method employed is a decomposition proposed by Firpo, Fortin and Lemieux, which allows extending the OaxacaBlinder approach to decompose some distributive statistics of income between a 'composition effect' and a 'returns effect'. The study concludes that the process of increasing labour market formalization had an equalizing effect over the period, a finding that had not been emphasized in previous studies.

Is productive capacity a key factor to reduce inequalities in South America?

“…Nowadays, it is still below US data (12 years) (Barro and Lee 2013). Beccaria, Maurizio, and Vázquez (2015) found evidence of that in Argentina, Parro and Reyes (2017) and Rodríguez-Castelán et al (2016) in Chile and to Wang, Lustig, and Bartalotti (2016) and Jaume (2018) in Brazil. The reward for improved primary school coverage wourld be greater than improvements in tertiary education.…”

Money as a social relation beyond the state: a contribution to the institutionalist approach based on the Argentinian trueque

“…After this crisis, the trueque partially recovered at local levels. Once Argentina abandoned the peso‐dollar parity in 2002, GDP and employment rose sharply, and income inequality diminished (Beccaria, Maurizio and Vázquez ). While participation in trueque systems also diminished compared to the early 2000s, they still attracted members of the urban working class who lacked stable jobs.…”

Reducción de la desigualdad de las remuneraciones e instituciones en Argentina (2002-2015)

“…El ejercicio, cuyos resultados se incluyen en la Tabla 3, muestra, sin embargo, que, cuando se controla por las otras variables la dimensión formalidad/ informalidad, tuvo un comportamiento desigualador. Ello no habría derivado de un aumento del premio promedio a la formalidad 7 , sino por el hecho de que este tuvo un comportamiento diferente en distintos puntos de la distribución (véanse los cambios de las relaciones entre percentiles).…”