An analysis of firm characteristics as earnings determinants: The urban Bolivia case

Arbeitspapier

This article analyzes the importance of firm characteristics to explain earnings in urban Bolivia. Initially I propose a new simple theoretical model of segmented labor market where, in equilibrium, individual and firm variables jointly determine earnings at the worker level. The key for achieving this equilibrium is that workers have both specific preferences and heterogonous skills provided by years of schooling, which are in turn associated to certain firms. Given the household surveys information, I estimate two alternative earnings functions from this model, one for unsalaried workers, for which there is detailed firm data and one for salaried workers, in which sector, size and formality are used as firm proxies. I find not only that firm characteristics are fundamental determinants of earnings but that regressions that include only individual characteristics present highly overestimated coefficients.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Development Research Working Paper Series ; No. 04/2016

Classification and Topics

• Classification: Wirtschaft ; Single Equation Models: Single Variables: Instrumental Variables (IV) Estimation ; Demand and Supply of Labor: General ; Human Capital; Skills; Occupational Choice; Labor Productivity ; Wage Level and Structure; Wage Differentials
• Subject: earnings functions ; labor market segmentation ; firm characteristics ; Bolivia

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Muriel Hernández, Beatriz
• Event: Veröffentlichung
• (who): Institute for Advanced Development Studies (INESAD)
• (where): La Paz
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/177356
• Last update: 10.03.2025, 11:45 AM CET