Analyzing wage gaps for indigenous in informal and formal labor markets in Latinamerica: The case of Bolivia, Brazil, Ecuador, Guatemala, Nicaragua and Perú

This paper analyzes the size, components and determinants of wage gaps in formal and informal labor markets in six Latin American countries, emphazising on the indigenous wage gaps inside these employment sectors. To this aim household suveys carried out on 2001 are analyzed. The results from the decomposition are according to the literature and show that there exists large wage gaps between formal and informal sectors and against indigenous population. The unxplained portion of the wage gap tend to be high which could re‡ect high levels of discriminatio. I also …nd evidence that the unexplained wage gap is higher in informal sector of the labor market in all the countries, but is even higher in countries with high density of indigenous population. Regarding the determinants we …nd that experience increases the unexplained wage gap in formal markets and decreases it on informal markets in countries with higher levels of indigenous population,while education works in the opposite direction. Keywords: Discrimination, Indigenous, Latin America, Informality JEL Classi…cation: J70, O17,