The Effects of Changes in the Legal Work Shift on Wages and Hours Worked in Colombia

Abstract

"We estimate the effect of an increase in the number of work hours, defined by law as daytime work hours, on hourly wages and hours of work. To identify the parameter of interest, we estimate difference-in-differences models. Although the data do not contain information on the work shift, we exploit the necessary conditions for the intervention to affect the work shift in order to define treatment and comparison groups. We find that wages of males older than 25 working in the manufacturing sector in Colombia s main metropolitan areas decreased by more than 11% due to the reform, while their female counterparts reduced their hours of work per week by 3.6 hours. There is (less robust) evidence of increases in hourly wages for male workers in the other sectors of the economy, suggesting that employers increased their demand for labor in those sectors. Overall, the reform appears to have had positive effects on all affected workers except those working in the manufacturing sector."