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Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.
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Income Inequality and Poverty in Colombia - Part 1. The Role of the Labour Market
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- Isabelle Joumard1, Juliana Londoño Vélez1
- Author Affiliations
- 1: OECD, France
- 27 mars 2013
- Bibliographic information
Income inequality in Colombia has declined since the early 2000s but remains very high by international standards. Income dispersion largely originates from the labour market, which is characterised by a still high unemployment rate, a pervasive informal sector and a wide wage dispersion reflecting a large education premium for those with higher education. Reducing income inequality is a key government objective and this requires improving the performance of the labour market. Raising educational outcomes for all and enhancing training programmes would help improve labour supply and productivity. Formal job creation however remains heavily constrained by restrictive labour market regulations, in particular very substantial non-wage labour costs and a minimum wage which is high compared to average incomes. The 2012 tax reform reduces non-wage labour costs but more decisive steps are needed to create the right conditions and incentives to boost formal employment.
- inequality, gender discrimination, informal economy, education, Colombia, labour taxes, poverty
- Classification JEL:
- H23: Public Economics / Taxation, Subsidies, and Revenue / Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- H52: Public Economics / National Government Expenditures and Related Policies / Government Expenditures and Education
- I24: Health, Education, and Welfare / Education and Research Institutions / Education and Inequality
- I3: Health, Education, and Welfare / Welfare, Well-Being, and Poverty
- I32: Health, Education, and Welfare / Welfare, Well-Being, and Poverty / Measurement and Analysis of Poverty
- J16: Labor and Demographic Economics / Demographic Economics / Economics of Gender; Non-labor Discrimination
- J2: Labor and Demographic Economics / Demand and Supply of Labor
- J3: Labor and Demographic Economics / Wages, Compensation, and Labor Costs
- O17: Economic Development, Innovation, Technological Change, and Growth / Economic Development / Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
- O5: Economic Development, Innovation, Technological Change, and Growth / Economywide Country Studies