Is there a link between labour productivity and wages in Argentine manufacturing?
Does it vary between different technical and productive categories and wage
levels? What factors affect this relationship, in the light of the country’s premature
deindustrialization? Employing a firm-level dataset for 2010–2021 from the National
Survey on Employment and Innovation Dynamics (ENDEI) database, we estimate
the link between productivity and wages across the conditional wage distribution
among manufacturing firms. Our results confirm a positive but extremely low
wage-productivity pass-through that differs between sectors according to their
technical and productive capabilities and is robust to alternative estimation strategies.
These asymmetrical firm-level distribution patterns carry substantial implications
for the macroeconomic trajectory of the country, as they are perpetuating the
underdevelopment trap.