Slow dynamics of job flow rates in colombian industry

Abstract

This study examines the creation and destruction of jobs in the Colombian industrial sector, at the establishment level. To achieve this purpose, the traditional academic literature on this issue is integrated with the most recent literature on the production factor shares in the product, which allows the analysis to be focused on market conditions. A close positive relationship is found between job flow rates and the labor income share in the product value, and a negative relationship with markups. The expected negative relationship between these job flow rates and the degree of concentration in the manufacturing sector markets is not obtained, given the low dynamics of changes that were registered in this sector. The above statistical relationships have strong implications for decisions in designing the labor market policies.The empirical analysis uses two econometric techniques, a static GMM and a dynamic Arellano-Bond with instrumental variables and fixed effects. Additionally, a robustness test is performed with a difference-in-differences model.