Journal ArticleDOI
The Impact of Firing Costs on Turnover and Unemployment: Evidence from the Colombian Labour Market Reform
TLDR
In this paper, the authors examined the impact of the Colombian Labor Market Reform of 1990, which substantially reduced dismissal costs, on worker turnover by exploiting the temporal change in the Colombian labor legislation as well as the variability in coverage between formal and informal sector workers.Abstract:
Reductions in firing costs are often advocated as a way of increasing the dynamism of labor markets in both developed and less developed countries. Evidence from Europe and the U.S. on the impact of firing costs has, however, been mixed. Moreover, legislative changes both in Europe and the U.S. have been limited. This paper, instead, examines the impact of the Colombian Labor Market Reform of 1990, which substantially reduced dismissal costs. I estimate the incidence of a reduction in firing costs on worker turnover by exploiting the temporal change in the Colombian labor legislation as well as the variability in coverage between formal and informal sector workers. Using a grouping estimator to control for common aggregate shocks and selection, I find that the exit hazard rates into and out of unemployment increased after the reform by over 1 percent for formal workers (covered by the legislation) relative to informal workers (uncovered). The increase of the hazards implies a net decrease in unemployment of a third of a percentage point, which accounts for about one quarter of the fall in unemployment during the period of study.read more
Citations
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Journal ArticleDOI
Vouchers for Private Schooling in Colombia: Evidence from a Randomized Natural Experiment
TL;DR: The authors found that winners were about 10 percentage points more likely to have finished 8th grade, primarily because they were less likely to repeat grades, and scored 0.2 standard deviations higher on achievement tests.
Journal ArticleDOI
Trade reforms and wage inequality in Colombia
TL;DR: The authors investigate the effects of the drastic tariff reductions of the 1980s and 1990s in Colombia on the wage distribution and find that the increase in the size of the informal sector is related to increased foreign competition.
Journal ArticleDOI
The effect of employment protection on worker effort: absenteeism during and after probation
Andrea Ichino,Regina T. Riphahn +1 more
TL;DR: In this paper, the authors show that the number of days of absence per week increases significantly once employment protection is granted at the end of probation, which suggests that the provision of employment protection causes the increase in absenteeism.
Posted Content
Rural Windfall or a New Resource Curse? Coca, Income, and Civil Conflict in Colombia
TL;DR: This article studied the economic and social consequences of a major exogenous shift in the production of one such resource - coca paste - into Colombia, where most coca leaf is now harvested and found that this shift generated only modest economic gains in rural areas, primarily in the form of increased self-employment earnings and increased labor supply by teenage boys.
Posted Content
The Response of the Informal Sector to Trade Liberalization
Pinelopi Koujianou Goldberg,Pinelopi Koujianou Goldberg,Pinelopi Koujianou Goldberg,Nina Pavcnik,Nina Pavcnik,Nina Pavcnik +5 more
TL;DR: This article examined the relationship between trade liberalization and informality in Brazil and Colombia, and found no evidence that increased foreign competition in developing countries leads to an expansion of the informal sector, defined as the sector that does not comply with labor market legislation.
References
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Journal ArticleDOI
Characterizing selection bias using experimental data
TL;DR: In this article, a semiparametric method is developed to estimate the bias that arises from using nonexperimental comparison groups to evaluate social programs and to test the identifying assumptions that justify matching, selection models, and the method of difference-in-differences.
Book
The econometric analysis of transition data
TL;DR: In this paper, the gamma function and distribution of the Laplace transform have been investigated in the context of model building, and the hazard function has been shown to be an important process in modeling structural transition models.
Posted Content
Characterizing Selection Bias Using Experimental Data
TL;DR: Semiparametric econometric methods are applied to estimate the form of selection bias that arises from using nonexperimental comparison groups to evaluate social programs and to test the identifying assumptions that justify three widely-used classes of estimators.
Journal ArticleDOI
Firing Costs and Labour Demand: How Bad is Eurosclerosis?
TL;DR: In this paper, a model of firms' optimal employment policies under linear adjustment costs is proposed, and it is shown that firing costs have a larger effect on firms' propensity to fire than to hire, and (slightly) increase average long run employment.