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Table 7 Average tariff and wage differentials formal and informal workers OLS and IV estimators

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

Dep. var.: residual wage differential

OLS

IV

(1)

(2)

(3)

(4)

(5)

(6)

A) Definition 1: share of small-size firms in industry

 Log of average tariff

− 0.116 [0.058]*

− 0.117 [0.068]*

− 0.003 [0.112]

− 0.274 [0.140]*

− 0.358 [0.178]*

− 0.377 [0.203]*

 Log of average tariff * NT

− 0.121 [0.105]

− 0.108 [0.112]

− 0.130 [0.124]

− 0.258 [0.195]

− 0.202 [0.216]

− 0.261 [0.244]

 Observations

64

64

64

64

64

64

 \(R^2\)

0.45

0.46

0.505

   

First stage result

 Log of average tariff

  Average  \(z^2\)

   

− 0.633 [0.190]***

− 0.505 [0.174]***

− 0.474 [0.137]***

  Average  \(z^2\) * NT

   

0.006 [0.214]

− 0.044 [0.198]

0.110 [0.158]

  \(R^2\)

   

0.34

0.49

0.69

 Log of average tariff * NT

  Average  \(z^2\)

   

− 0.059 [0.156]

0.049 [0.143]

0.062 [0.136]

  Average  \(z^2\) * NT

   

− 0.533 [0.176]***

− 0.579 [0.162]***

− 0.510 [0.156]***

  \(R^2\)

   

0.98

0.99

0.99

B) Definition 2: indicator of small-size industry

 Log of average tariff

− 0.116 [0.058]*

− 0.117 [0.068]*

− 0.004 [0.112]

− 0.275 [0.139]*

− 0.358 [0.177]*

− 0.378 [0.202]*

 Log of average tariff * NT

− 0.121 [0.105]

− 0.107 [0.111]

− 0.129 [0.124]

− 0.256 [0.195]

− 0.201 [0.216]

− 0.260 [0.243]

 Observations

64

64

64

64

64

64

 \(R^2\)

0.45

0.46

0.50

   

First stage result

 Log of average tariff

  Average  \(z^2\)

   

− 0.633 [0.190]***

− 0.505 [0.174]***

− 0.474 [0.137]***

  Average  \(z^2\) * NT

   

0.006 [0.214]

− 0.044 [0.198]

0.110 [0.158]

  \(R^2\)

   

0.34

0.49

0.688

 Log of average tariff * NT

  Average  \(z^2\)

   

− 0.058 [0.156]

0.048 [0.143]

0.062 [0.135]

  Average  \(z^2\) * NT

   

− 0.533 [0.176]***

− 0.579 [0.162]***

− 0.510 [0.156]***

  \(R^2\)

   

0.98

0.99

0.99

Log relative supply

Yes

Yes

Yes

Yes

Yes

Yes

Log relative supply of informal workers

No

Yes

Yes

No

Yes

Yes

Log relative supply of skilled workers

No

Yes

Yes

No

Yes

Yes

Linear time trend

No

No

Yes

No

No

Yes

  1. Times series regressions of formal-informal residual wage differential on the national average tariff. Robust standard errors clustered by year and sector level in brackets. Average \(z^{2}\)is the average of the instrument based on exchange rates of main partners weighted by the participation of each industry in total employment
  2. *** Significant at 1%
  3. * Significant at 10%