@TechReport{iza:izadps:dp8945,
            	author={Agudelo, Sonia A. and Sala, Hector},
            	title={Wage Setting in the Colombian Manufacturing Industry},
            	year={2015},
	month={Mar},
            	institution={Institute of Labor Economics (IZA)},
            	address={Bonn},
            	type={IZA Discussion Paper},
            	number={8945},
            	url={https://www.iza.org/index.php/publications/dp8945},
	abstract={We show that wage setting in the Colombian manufacturing industry is not fundamentally driven by labor productivity in contrast to the standard theoretical prediction. On the contrary, internal institutional arrangements – payroll taxation, the minimum wage or the price wedge between manufacturing and consumption prices – together with a higher exposure to international trade – connected to the increasing globalization of the Colombian economy – appear as the crucial drivers. These findings lead us to question the political strategy followed to attain cost competitiveness in a context of growing exposure to international trade. Implementation of a true wage bargaining system is suggested as a critical policy target to prevent the disruptive economic consequences of the current wage setting mechanism and help rebalance the trade deficit.},
	keywords={minimum wages;payroll taxes;trade openness;labor productivity;wage setting;price wedge},
            }