Is the wage curve formal or informal? Evidence for Colombia
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ELSEVIER SCIENCE SA
Using microdata from the 2002-2006 Colombian Continuous Household Survey, we find an elasticity of individual wages to local unemployment rates of - 0.07. However, the elasticity for informal workers is significantly higher, a result which is consistent with efficiency wage theoretical models and relevant for regional labour market analysis in developing countries. © 2010 Elsevier B.V.