The effect of the financial crisis in 2002 on the hours worked and wages of urban workers in Argentina  

Oleh:

Maqsood, Neelum

Jenis: Article from Proceeding
Dalam koleksi: SIBR-Thammasat 2014 Conference on Interdisciplinary Business & Economics Research June 5th- 7th, 2014 di Emerald Hotel Bangkok, page 1.
Topik: labour; crisis; informal sector
Fulltext: b14-014.pdf (13.15KB)

Isi artikel

This paper builds on the existing research on the impact of the economic crisis on the affected economy’s labour market. It studies the effect of the financial crisis of 2001-02 on the wages and hours worked, taking the urban agglomerate of Greater Buenos Aires in Argentina as a case study. Existing research that employs techniques such as probit analysis and difference-in-difference estimates is used in this paper to devise a fixed-effects model. A secondary analysis on the role of occupational characteristics including contract type, public/private sector, formal/informal sector and firm size in determining the effect of the crisis is also carried out in this paper. Results for the fixed-effects estimates show that the crisis has a significant negative effect on wages. Even though comparative estimates using matching, pooled OLS and GMM show different absolute values of the estimate, the effect is still predicted to be negative and significant. On the other hand, hours worked do not change significantly in response to the crisis. In addition, it is found that the effect of the crisis differs across individuals depending on their occupational characteristics. The results show that individuals working in the public sector, larger firms and informal sector were less vulnerable to the crisis. The findings pertaining to informal sector are unexpected. It shows that the effect of the crisis on the different elements of the economy depends on the particular conditions of the economy. In Argentina, the formal sector at that time was equivalent to the informal sector in terms of immunity against crisis. In fact, workers were less protected than those in informal sector and for that reason, they responded negatively to the crisis.

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