1. Cycles versus Trends: The Effects of Economic Growth on Earnings in Bolivia
- Author:
- Beatriz Muriel H. and Horacio Vera C.
- Publication Date:
- 08-2015
- Content Type:
- Working Paper
- Institution:
- Institute for Advanced Development Studies (INESAD)
- Abstract:
- This paper analyzes the effects of economic growth on labor earnings in Bolivia during 1999-2012. More precisely, we develop a labor market model to capture both cycle and trend effects of prices, and production on earnings, which is estimated econometrically using pseudo-panel data methods. The results show that labor earnings have had a pro-cyclical behavior. In particular, we find that, in the short run, an increase of 1% in prices or production explains an earnings rise of around 0.5%, while, in the long run, a production increase of 1% is associated with an earnings variation of 0.4%. Furthermore, we find that labor earnings growth by sector follows, to some extent, the economic performance of its corresponding sector, which responds to the sector segmentation characteristics in the Bolivian labor market.
- Topic:
- Business, Economic Growth, Earnings, and Wages
- Political Geography:
- South America and Bolivia