An Investigation of the Labor Market Earnings of Panamanian Males Evaluating the Sources of Inequality

This paper presents empirical evidence on the determinants of labor market earnings and inequality for males in Panama. Using newly available microdata, we estimate earnings equations based on the measurement framework of Mincer (1974) and compare them with those for other countries at various stages of economic development. We present evidence on two aspects of inequality in less developed economies: labor market segmentation and social stratification. We present tests of the segmentation hypothesis, including several of the dual labor market hypotheses and discuss their inherent ambiguity. We also present evidence on the importance of family background for earnings determination and educational attainment.