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Table 6 Industry tariffs and wage differentials formal and informal workers OLS and IV estimation

From: Trade liberalization and informality in Argentina: exploring the adjustment mechanisms

Dep. var.: logarithm of workers’ hourly wages OLS IV
(1) (2) (3) (4)
A) Definition 1: share of small-size firms in industry
 = 1 if informal − 0.153 [0.095] − 0.112 [0.097] − 0.082 [0.183] − 0.129 [0.193]
 Log of tariffs 0.034 [0.022] 0.037 [0.022]* 0.065 [0.069] 0.02 [0.063]
 = 1 if informal*Log of tariffs − 0.005 [0.029] − 0.025 [0.033] − 0.368 [0.216]* − 0.24 [0.182]
 = 1 if informal*Log of tariffs*S   0.015 [0.018]   0.01 [0.023]
 Observations 20661 20661 20661 20661
 \(R^2\) 0.38 0.38   
B) Definition 2: indicator of small-size industry
 = 1 if informal − 0.153 [0.095] − 0.122 [0.094] − 0.082 [0.183] − 0.204 [0.222]
 Log of tariffs 0.034 [0.022] 0.036 [0.022]* 0.065 [0.069] 0.017 [0.065]
 = 1 if informal*Log of tariffs − 0.005 [0.029] − 0.021 [0.030] − 0.368 [0.216]* − 0.239 [0.193]
 = 1 if informal*Log of tariffs*S   0.009 [0.009]   0.01 [0.011]
 Observations 20661 20661 20661 20661
 \(R^2\) 0.38 0.38   
  1. Cross-section panel regressions of formal-informal wage differential and industry tariffs. Industry size S defined based on the share of small firms in each industry in 1980 (panel A) and as a dummy indicating small industries in 1980 (panel B). Robust standard errors clustered at the industry-year level in brackets
  2. * Significant at 10%