Skilled and Unskilled Wages in Uruguay, 1915-2015

Abstract

The main purpose of this paper is to analyze the evolution of the wage gap between skilled and unskilled labor in line with changes in subsequent economic productive models. Following this line of research, we need to construct a long-run series of the evolution of skilled and unskilled wages. Research on the long-term evolution of wages in Uruguay has been slow due to the lack of sources for its reconstruction. However, a wage series for unskilled construction workers for the years 1879-1996 is available (Bértola et al. 1999). On the basis of this series an interpretation of the evolution of real wages has been constructed, which covers three major periods: 1870-1930, with slow growth of real wages and GDP, the State-led industrialization period (1930-1970) with a significant growth of GDP and an even higher increase of real wages, and a final period, which featured the discontinuation of this trend and a sharp decrease of real wages within the context of GDP growth followed by a very slow wage recovery from 1985 onwards. In this research we will present a new wage series for skilled, semi-skilled and unskilled workers for the years 1918-2010 in Uruguay, which will take into account the global economic context of each period and its impact on wages. We will focus on the relevance of the evolution of the skill premium and inequality. We look at the correlation between wages and GPD per capita growth and the Gini coefficient. In the last chapter we will compare our series with similar series for six Latin American countries in the course of the 20th century (Astorga 2017).