Wage Inequality and the Labour Market in Argentina: Labour Institutions, Supply and Demand in the Period 1980-99

Abstract

The present study is concerned with the economic and institutional factors affecting the relationship between the labour market and wage inequality in the Greater Buenos Aires area (GBA) over the period 1980-99. The main hypothesis advanced is that the variations in levels of wage inequality were caused by changes in economic conditions and by the reforms implemented in the labour market, which were key factors in the process of wage determination and in the generalization of atypical and precarious forms of employment that impacted upon the distribution structure. In particular, the study considers long-term trends in wage inequality affecting employees in Greater Buenos Aires and the development of the labour market in the light of the institutional and economic factors that are relevant to wage inequality. In the empirical analysis, various econometric models are applied and the Theil index is broken down over population subsets defined in accordance with the employees' economic, demographic, labour and human resources characteristics.