Juan Muro

Sheepskin effects by cohorts in Colombia

Purpose - The purpose of this paper is to discuss sheepskin effects in Colombia based on repeated cross-section or pseudo panel data using cohorts in seven larges cities in Colombia. Design/methodology/approach - A Pseudo Panel Data methodology is used as the basis for determining and testing sheepskin effects using labor market microdata in Colombia in the time period from 1996 to 2000. Findings - Empirical evidence suggests that there are additional salary increases of 14 percent for individuals who hold a secondary degree and approximately 26 percent for holders of university degrees in Colombia. Originality/value - Testing sheepskin effects based on pseudo panel data using cohorts.

Recurrent unemployment, welfare benefits and heterogeneity

The objective of this paper is to investigate the causes of the recurrences of individuals in unemployment during benefit periods. So as to attain this objective, we use administrative data from the Spanish Employment Agency to estimate a duration model with multiple spells that allows for unemployment state dependence through lagged unemployment duration in order to distinguish the heterogeneity and scarring effects. We find that an increase in the duration of previous unemployment benefit periods lengthens the expected duration of future unemployment benefit periods. True state dependence and heterogeneity, intensity of job search and local labour market conditions are among the elements that explain this unemployment state dependence.

Duration data models, unemployment benefits and bias

Traditional approaches to measurement conditional probabilities of leaving welfare do not deal with unemployment benefits data in a proper way leading thus to biased estimates of unemployment–employment transition probabilities. In fact, these approaches overestimate hazard rates and hence underestimate the expected welfare duration.

Consistent estimation of pseudo panels in the presence of selection bias

In the presence of selection bias, traditional estimators of pseudo panel data are inconsistent. In this paper, the authors derive the conditions under which consistence is achieved in pseudo-panel estimation and propose a simple test of selection bias. Specifically, they propose a Wald test for the null hypothesis that there is no selection bias. Under rejection of the null hypothesis, the authors can consistently estimate pseudo-panel parameters. They use cross sections and pseudo-panel regressions to test for selection bias and estimate the returns to education in Colombia. The authors corroborate the existence of selection bias and find that returns to education are around twenty percent.

A cohort-based analysis of the influence of minimum wage levels on labour force participation in the informal sector : quantitative and substitution effects

This paper discuses the effect of the minimum wage on the decision to join the informal job sector. We estimated a pseudo panel of the engagement in the informal sector using an IV-probit. The findings show that an increase in the minimum wage leads to a substitution effect between young and older workers. This results show that the standards effects over the labor market in the WGM segmented model are moderate because an increase of the minimum wage doesn’t imply total mobility between sectors.

Persistence of Informality in a Developing Country

Informality is a common phenomenon in developing countries and an unusual one in industrialized countries. The persistence of informal employment is indicative of the impossibility of moving out of this status for a certain period of time. Using pseudo panel data, empirical evidence is presented to show that this phenomenon occurs in a developing country like Colombia where education helps mitigate said persistent occurrence. The authors also present evidence that a minimum salary increase does not only result in increased informality, but also increases the persistence of informality. This kind of evidence can be used for discussing the persistence of informality in other developing countries.