Productivity dispersion and dual labour markets : evidence from 14 Latin American Countries
Professor Advisor
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Puentes Encina, Esteban
Author
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González, Alejandro
Admission date
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2020-01-23T15:05:15Z
Available date
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2020-01-23T15:05:15Z
Publication date
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2019-11
Identifier
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https://repositorio.uchile.cl/handle/2250/173289
General note
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TESIS PARA OPTAR AL GRADO DE Magister en Economía
es_ES
Abstract
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A key feature of developing
economies is the coexistence of large pools of subsistence
workers alongside workers employed in the modern sector of the economy. Traditional theories
of dualism predict that in creases in the productivity of the modern sector willn eventually absorb
the subsistence sector.I test this hypothesis by estimating the reduced-form correlation between
productivity and the probability of belonging to the subsistence sector by merging measures of
industry wide productivity from urban registered firm with labor market outcomes from 14 Latin
American countries.My empirical strategy uses a finite mixture model which estimates jointly
the wages corresponding to each sector and the segment to which the worker belongs,which is
treated as a latent variable. Surprisingly,I find that my measure ofi ndustry wide productivity has
a negligible influence on the probability that workers switch from the subsistence to the modern
sector. Nevertheless,I find strong evidence of dualism and substantial hourly wage diferentials
across sectors;the average treatment effect of switching to the modern sector is a 14% wage gain