Determinants of labor demand in the Colombian manufacturing sector, 2000-2010

This paper studies the determinants of labor demand for professional, administrative and blue-collar workers in the Colombian manufacturing sector. The results show that the demand for blue-collar employees exhibits the largest adjustment time and is the most sensitive to changes in total labor costs. These results suggest that policies aimed at reducing nonwage costs may be effective to raise the demand for low skilled workers. Finally, the short-run (long-run) demand for professional (administrative) workers is found to be the most sensitive to changes in production.