The Role of Firm Dynamics in Aggregate Productivity, Job Flows, and Wage Inequality in Ecuador
This paper examines the role of firm dynamics in aggregate total factor productivity, job flows, and wage inequality in Ecuador. Utilizing a comprehensive employer-employee dataset, the paper documents firm dynamics and job flow patterns that are consistent with the presence of market distortions. Also, the paper identifies factor misallocation as the main contributor to Ecuador's total factor productivity deceleration. Given these trends, the paper explores allocative inefficiency drivers through firm- and industry-level regressions. Firms in the top productivity quintile face distortive non-wage labor costs that are 3.7 times higher than the bottom quintile, after controlling for firm size and age. The findings also provide evidence of credit misallocation across firms. Additionally, industries with higher job mobility, credit access, and competition and lower non-wage labor costs, minimum wage incidence, and zombie firms demonstrate higher allocative efficiency. Moreover, worker-level regressions indicate that misallocation drivers explain up to 41 percent of wage inequality, with non-wage labor costs and product market frictions as distortions driving this inequality.
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Format: | Working Paper biblioteca |
Language: | English en_US |
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Washington, DC: World Bank
2024-03-27
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Subjects: | FIRM PERFORMANCE, AGGREGATE PRODUCTIVITY, JOB FLOWS, WAGE INEQUALITY, |
Online Access: | http://documents.worldbank.org/curated/en/099210003272435670/IDU12ee097181a742148c01b05d15e384067ed0a https://hdl.handle.net/10986/41297 |
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dig-okr-10986412972024-04-09T15:52:09Z The Role of Firm Dynamics in Aggregate Productivity, Job Flows, and Wage Inequality in Ecuador Patiño Peña, Fausto Ferro, Esteban FIRM PERFORMANCE AGGREGATE PRODUCTIVITY JOB FLOWS WAGE INEQUALITY This paper examines the role of firm dynamics in aggregate total factor productivity, job flows, and wage inequality in Ecuador. Utilizing a comprehensive employer-employee dataset, the paper documents firm dynamics and job flow patterns that are consistent with the presence of market distortions. Also, the paper identifies factor misallocation as the main contributor to Ecuador's total factor productivity deceleration. Given these trends, the paper explores allocative inefficiency drivers through firm- and industry-level regressions. Firms in the top productivity quintile face distortive non-wage labor costs that are 3.7 times higher than the bottom quintile, after controlling for firm size and age. The findings also provide evidence of credit misallocation across firms. Additionally, industries with higher job mobility, credit access, and competition and lower non-wage labor costs, minimum wage incidence, and zombie firms demonstrate higher allocative efficiency. Moreover, worker-level regressions indicate that misallocation drivers explain up to 41 percent of wage inequality, with non-wage labor costs and product market frictions as distortions driving this inequality. 2024-03-27T17:36:15Z 2024-03-27T17:36:15Z 2024-03-27 Working Paper http://documents.worldbank.org/curated/en/099210003272435670/IDU12ee097181a742148c01b05d15e384067ed0a https://hdl.handle.net/10986/41297 English en_US Policy Research Working Paper; 10739 CC BY 3.0 IGO https://creativecommons.org/licenses/by/3.0/igo/ World Bank application/pdf text/plain Washington, DC: World Bank |
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FIRM PERFORMANCE AGGREGATE PRODUCTIVITY JOB FLOWS WAGE INEQUALITY FIRM PERFORMANCE AGGREGATE PRODUCTIVITY JOB FLOWS WAGE INEQUALITY |
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FIRM PERFORMANCE AGGREGATE PRODUCTIVITY JOB FLOWS WAGE INEQUALITY FIRM PERFORMANCE AGGREGATE PRODUCTIVITY JOB FLOWS WAGE INEQUALITY Patiño Peña, Fausto Ferro, Esteban The Role of Firm Dynamics in Aggregate Productivity, Job Flows, and Wage Inequality in Ecuador |
description |
This paper examines the role of firm
dynamics in aggregate total factor productivity, job flows,
and wage inequality in Ecuador. Utilizing a comprehensive
employer-employee dataset, the paper documents firm dynamics
and job flow patterns that are consistent with the presence
of market distortions. Also, the paper identifies factor
misallocation as the main contributor to Ecuador's
total factor productivity deceleration. Given these trends,
the paper explores allocative inefficiency drivers through
firm- and industry-level regressions. Firms in the top
productivity quintile face distortive non-wage labor costs
that are 3.7 times higher than the bottom quintile, after
controlling for firm size and age. The findings also provide
evidence of credit misallocation across firms. Additionally,
industries with higher job mobility, credit access, and
competition and lower non-wage labor costs, minimum wage
incidence, and zombie firms demonstrate higher allocative
efficiency. Moreover, worker-level regressions indicate that
misallocation drivers explain up to 41 percent of wage
inequality, with non-wage labor costs and product market
frictions as distortions driving this inequality. |
format |
Working Paper |
topic_facet |
FIRM PERFORMANCE AGGREGATE PRODUCTIVITY JOB FLOWS WAGE INEQUALITY |
author |
Patiño Peña, Fausto Ferro, Esteban |
author_facet |
Patiño Peña, Fausto Ferro, Esteban |
author_sort |
Patiño Peña, Fausto |
title |
The Role of Firm Dynamics in Aggregate Productivity, Job Flows, and Wage Inequality in Ecuador |
title_short |
The Role of Firm Dynamics in Aggregate Productivity, Job Flows, and Wage Inequality in Ecuador |
title_full |
The Role of Firm Dynamics in Aggregate Productivity, Job Flows, and Wage Inequality in Ecuador |
title_fullStr |
The Role of Firm Dynamics in Aggregate Productivity, Job Flows, and Wage Inequality in Ecuador |
title_full_unstemmed |
The Role of Firm Dynamics in Aggregate Productivity, Job Flows, and Wage Inequality in Ecuador |
title_sort |
role of firm dynamics in aggregate productivity, job flows, and wage inequality in ecuador |
publisher |
Washington, DC: World Bank |
publishDate |
2024-03-27 |
url |
http://documents.worldbank.org/curated/en/099210003272435670/IDU12ee097181a742148c01b05d15e384067ed0a https://hdl.handle.net/10986/41297 |
work_keys_str_mv |
AT patinopenafausto theroleoffirmdynamicsinaggregateproductivityjobflowsandwageinequalityinecuador AT ferroesteban theroleoffirmdynamicsinaggregateproductivityjobflowsandwageinequalityinecuador AT patinopenafausto roleoffirmdynamicsinaggregateproductivityjobflowsandwageinequalityinecuador AT ferroesteban roleoffirmdynamicsinaggregateproductivityjobflowsandwageinequalityinecuador |
_version_ |
1798164846086193152 |