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There are several possible explanations for the observed changes in inequality, the returns to education, and the gap between the wages of informal and formal salaried workers in Argentina over the period 1980-2002. Largely due to the lack of evidence for competing explanations, skill-biased technical change is the most likely explanation for the increases in the returns to education that occurred in the 1990s. Using a semi-parametric re-weighting variance decomposition technique and data from the Permanent Household Survey, the authors show that during the same period there was an increase in the returns to unobserved skill. This finding lends support to the hypothesis that skill-biased technical change has been a main driver of increases in inequality in Argentina. The pattern of changes suggests that the growth in returns to unobserved skill may have been partly responsible for the relative deterioration of informal salaried wages during the 1990s.

Access and Equity in Basic Education --- Debt Markets --- Earnings Inequality --- Education --- Education for All --- Finance and Financial Sector Development --- Household Survey --- Labor Markets --- Minimum wage --- Primary Education --- Salaried employment --- Salaried workers --- Skilled workers --- Social Protections and Labor --- Union membership --- Wage distribution --- Wage employment --- Wage inequality

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This paper identifies and quantifies three distortions caused by the existing social security and social assistance systems in Colombia. These distortions refer to the discrepancy between the cost of formal social security for the employer and the worker's valuation of the received service (social distortion): the differences in social security benefits received by salaried and self-employed formal workers (occupational distortion); and the discrepancy caused by the cost in employing a formal instead of an informal worker (informal distortion). Based on recently collected information concerning Colombian workers' willingness to pay for several packages of social security benefits, the study calculates that social distortions range from 2 to 27 percent of the workers' labor earnings; the occupational distortion amounts to 50 percent of formal salaried workers' earnings; and the informal distortions represent between 45 and 56 percent of formal workers' labor income. Results indicate that valuations of the contributive and noncontributive protection systems play a key role in explaining these distortions. In addition, the Colombian social protection system thereby places a hefty tax on the formal worker (and employer) while transferring resources to the informal worker, but these distortions are not sufficient to revert differentials in earnings among formal and informal workers.

Disabilities --- Dismissal --- Environmental disasters --- Families --- Health care --- Health Monitoring & Evaluation --- Health, Nutrition and Population --- Injuries --- Labor costs --- Labor market --- Labor Markets --- Labor Policies --- Labor Standards --- Living conditions --- Migration --- Mortality --- Population Policies --- Public health --- Quality of life --- Salaried workers --- Social policy --- Social Protections and Labor --- Social support --- Unemployed people --- Unemployment --- Worker --- Workers