Are Labour Markets Segmented in Developing Economies? A Clustering Approach for Colombian Workers
Labour markets in developing economies are usually thought to be segmented. Differences in productivity, red tape, and high taxes create a divide between a modern and an excluded traditional sector. More recently, some scholars have challenged this view. In this article, we propose to test the segm...
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| Format: | Article |
| Language: | Spanish |
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Universidad Nacional de Colombia
2024-12-01
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| Series: | Ensayos de Economía |
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| Online Access: | https://revistas.unal.edu.co/index.php/ede/article/view/110808 |
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| author | David Arturo Rodriguez Guerrero Jorge Eliecer Quintero |
| author_facet | David Arturo Rodriguez Guerrero Jorge Eliecer Quintero |
| author_sort | David Arturo Rodriguez Guerrero |
| collection | DOAJ |
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Labour markets in developing economies are usually thought to be segmented. Differences in productivity, red tape, and high taxes create a divide between a modern and an excluded traditional sector. More recently, some scholars have challenged this view. In this article, we propose to test the segmented markets hypothesis using a clustering method applied to Colombian workers. Following Anderson et al. (1987) we hypothesize that if the first view prevails, the labour market has well-defined worker clusters that our empirical strategy could uncover. Using the FAMD-K-means algorithm we find three clusters: one comprises half the workforce, has workers with secondary education or vocational training, without labour contracts, and median earnings slightly above the minimum wage. The second group comprises 37% of the workforce, older workers with even lower earnings and educational achievement, with more precarious jobs. The last cluster comprises good quality jobs, mostly with indefinite labour contracts, with workers with university degrees and median earnings close to four times the minimum wage. We statistically tested the differences between the informality definition and our method and found that the traditional measures have an important correlation with the clusters resulting from our model.
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| format | Article |
| id | doaj-art-3a94908e25eb4473b511d59aed9b0fb6 |
| institution | OA Journals |
| issn | 0121-117X 2619-6573 |
| language | Spanish |
| publishDate | 2024-12-01 |
| publisher | Universidad Nacional de Colombia |
| record_format | Article |
| series | Ensayos de Economía |
| spelling | doaj-art-3a94908e25eb4473b511d59aed9b0fb62025-08-20T02:21:47ZspaUniversidad Nacional de ColombiaEnsayos de Economía0121-117X2619-65732024-12-013465Are Labour Markets Segmented in Developing Economies? A Clustering Approach for Colombian WorkersDavid Arturo Rodriguez Guerrero0https://orcid.org/0000-0003-2670-3786Jorge Eliecer Quintero1https://orcid.org/0009-0003-6512-2025Universidad Externado de ColombiaUniversidad Externado de Colombia Labour markets in developing economies are usually thought to be segmented. Differences in productivity, red tape, and high taxes create a divide between a modern and an excluded traditional sector. More recently, some scholars have challenged this view. In this article, we propose to test the segmented markets hypothesis using a clustering method applied to Colombian workers. Following Anderson et al. (1987) we hypothesize that if the first view prevails, the labour market has well-defined worker clusters that our empirical strategy could uncover. Using the FAMD-K-means algorithm we find three clusters: one comprises half the workforce, has workers with secondary education or vocational training, without labour contracts, and median earnings slightly above the minimum wage. The second group comprises 37% of the workforce, older workers with even lower earnings and educational achievement, with more precarious jobs. The last cluster comprises good quality jobs, mostly with indefinite labour contracts, with workers with university degrees and median earnings close to four times the minimum wage. We statistically tested the differences between the informality definition and our method and found that the traditional measures have an important correlation with the clusters resulting from our model. https://revistas.unal.edu.co/index.php/ede/article/view/110808Labour informalityclustering methodsunsupervised machine learningsegmented market hypothesis |
| spellingShingle | David Arturo Rodriguez Guerrero Jorge Eliecer Quintero Are Labour Markets Segmented in Developing Economies? A Clustering Approach for Colombian Workers Ensayos de Economía Labour informality clustering methods unsupervised machine learning segmented market hypothesis |
| title | Are Labour Markets Segmented in Developing Economies? A Clustering Approach for Colombian Workers |
| title_full | Are Labour Markets Segmented in Developing Economies? A Clustering Approach for Colombian Workers |
| title_fullStr | Are Labour Markets Segmented in Developing Economies? A Clustering Approach for Colombian Workers |
| title_full_unstemmed | Are Labour Markets Segmented in Developing Economies? A Clustering Approach for Colombian Workers |
| title_short | Are Labour Markets Segmented in Developing Economies? A Clustering Approach for Colombian Workers |
| title_sort | are labour markets segmented in developing economies a clustering approach for colombian workers |
| topic | Labour informality clustering methods unsupervised machine learning segmented market hypothesis |
| url | https://revistas.unal.edu.co/index.php/ede/article/view/110808 |
| work_keys_str_mv | AT davidarturorodriguezguerrero arelabourmarketssegmentedindevelopingeconomiesaclusteringapproachforcolombianworkers AT jorgeeliecerquintero arelabourmarketssegmentedindevelopingeconomiesaclusteringapproachforcolombianworkers |