The objective of this dissertation is to explore the dynamics of different labor statuses (as an approximation of levels of job quality) in urban labor markets. The context in which this doctoral thesis is developed is Ecuador, a developing country characterized by high levels of labor precariousness due to the high rates of informality and underemployment that coexist in urban environments. The thesis is organized into five chapters, among which three investigations have been developed: 1) Employment quality and the role of minimum wage policy in Ecuador; 2) Agglomeration and employment quality: Evidence for Ecuador; 3) Polarization in Ecuador: An urban and innovation approach.
The aim of the first study is to explore the effects of the minimum wage on the probability of workers moving from marginal employment to another labor status with better job quality. To do so, we estimate a multinomial logistic model with four labor statuses as the dependent variable. The results confirm that the minimum wage is a tool to improve the quality of the most precarious workers (informal and underemployed). In addition, it benefits those with lower incomes. The research allows us to intuit the mechanisms that explain these findings, among which, for example, stands out a greater compliance with labor legislation following the increase in the individual contracting power that workers in a precarious employment situation could acquire.
The aim of the second research is to examine the effect of agglomeration economies on labor productivity. The main contribution is to study the heterogeneity of the effects of the local environment on labor productivity within the informal sector, where evidence is scarce. The study considers the activity status of workers as a parameter that allows analyzing agglomeration economies according to labor status. After estimating a two-stage extended Mincerian model (2SLS), with wages as a proxy for labor productivity and firm density as a proxy for local environment characteristics, our findings suggest that the informal sector experiences greater agglomeration economies than the formal sector. By disaggregating sectors, workers in marginal employment receive the highest urban wage premiums. The research analyses some of the possible mechanisms that could explain the results, as well as the main policy implications.
Finally, the third research aims to understand the determinants that explain labor and wage polarization in urban environments in Ecuador. The main contribution of the research is to highlight polarization as a dimension that allows us to explain, more broadly, labor dynamics and wage gaps. The study of polarization allows us to examine the transformations in the occupational structure due to the innovation of productive processes. The research tests whether the size of the city and/or the KIBS explain labor and wage polarization in Ecuador. The main findings highlight the role of the KIBS in explaining labor and wage polarization, over urban size. The study considers information from cities.
Among the main conclusions of the thesis, the focus of this dissertation is highlighted: the quality of employment in urban labor markets. This is a little-studied issue and, furthermore, it represents a bigger problem than unemployment in developing countries. Based on the specific results of each of the investigations, this dissertation offers some implications for public policy, such as, for example, minimum wage policy, pro-agglomeration policies, educational policies, among others.
Calidad del Empleo en mercados laborales urbanos: Nueva Evidencia para Ecuador
Moreno Hurtado, C. A. (Author). 19 May 2025
Student thesis: Doctoral thesis
Student thesis: Doctoral thesis