Abstract/Summary

During the past thirty years the Chilean economy generally and agriculture specifically have grown considerably, raising both per capita GDP and observed real wages of salaried workers. There has been, however, a concern about the country’s persistent unequal distribution of income. Among the possible factors associated with income inequality is the relatively infrequent use of contracts in seasonal and occasional work, both strongly present in agriculture. Based on Chilean household surveys (CASEN) for 1996 and 2006, impacts of contracts and work relationships (permanent, seasonal, etc.) on salaries, and their possible contributions to inequality, were measured, accounting for schooling, ethnicity, work experience, geographic zones, and other variables correlated with salaries. Separate hourly-wage equations for men and women were estimated. Ceteris paribus, employees with contracts earn more than those without, and those in a permanent work relationship earn more than those seasonally employed. The negative effects of not having a contract and being in a non-permanent work relationship are greater for women. Schooling is the single most important factor in explaining unequal salaries; however, the contribution of schooling to salary improvement has not changed considerably over time. Contracts and work relationship are important in explaining salary inequality, especially in the case of women.