The Dean of the Faculty of Economics and Business Administration is researching the role of markets in income inequality.
Investigate the role of markets in income inequality has led Álvaro García, dean of the Faculty of Economics and Business Administration from the Universidad de los Andes, to work on the project "Market Power and Labor Market Outcomes". after winning a Regular Fondecyt.
"The impact of dominant firms on the labor market is not necessarily negative, as is assumed in some circles. One way in which such firms could maintain their advantage over others would be to compete more aggressively for good workers, which could result in higher rents earned by workers in the organizations. The evidence suggests that employees earn better salaries in larger companies, but this example is only one possibility and there are other mechanisms that need to be studied more systematically to draw definitive conclusions," explains Alvaro Garcia, dean of the Faculty of Economics and Business Administration and researcher in charge of this project, who works with co-authors of the University of Alicante (Spain) and the Universidad de los Andes (Colombia).
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The impact of dominant firms on the labor market is not necessarily negative, as is assumed in some circles. One way in which such firms could maintain their advantage over others would be to compete more aggressively for good workers, which could result in an increase in the rents they earn in the organizations.
The teacher adds that labor markets are an important part of people's lives and the possibilities for personal and professional development depend on it operating efficiently, rewarding those who deserve it. "Market power erodes the potential gains of workers, therefore, understanding the scope of the latter is relevant for design policies that improve people's welfare. "In this research we use internal tax administrative data covering the labor trajectory of virtually all formal employment in Chile. This makes the research findings are more robust, since they do not depend on a particular sample, but on a relevant segment of the economy".García explains.
At this video the dean explains his research in detail.