Labor demand: Theory and empirical evidence for the colombian case

Abstract

This paper shows some of the most important theoretical topics for the analysis of labordemand, as well as the empirical evidence available for the Colombian case. Regarding thetheoretical aspects, the presentation focuses on the microeconomic discussion related to theproperties of labor demand originating from entrepreneurs endeavoring to maximize profits,who face productive processes based on the two variables of capital and labor. Next there is adiscussion on the effects of the liberalization and structural reforms on labor demand. Theliterature reviewed for the Colombian case shows in general how the elasticity estímate of thedemand of workers in relation to finished product and real wages differs substantially due tothe diversity in terms of econometric specifications, data temporality and data sources .