5. THE EFFECTS OF GLOBALIZATION ON WORKING CONDITIONS: EL SALVADOR, 1995–2005
157
TABLE 5.8 (continued) 2000 Independent variable
2004 Coefficient
2005
Coefficient
Z
z
Coefficient
z
Percent of children 6 to 12 years old (g2)
–0.50
–7.3*
–0.18
–1.9**
–0.60
–5.7*
g1*Female
–1.04
–9.2*
–0.61
–3.6*
–0.60
–3.2*
g2*Female
0.10
1.0
–0.09
–0.6
0.12
0.8
Region west
–0.22
–8.5*
–0.09
–2.2*
–0.14
–3.5*
Region central I dummy
–0.14
–5.3*
–0.03
–0.8
–0.10
–2.4**
Region central II dummy
–0.30
–10.6*
–0.28
–7.0*
–0.25
–6.4*
Region east dummy
–0.37
–13.2*
–0.29
–7.3*
–0.28
–6.8*
Constant
–1.80
–32.21*
/athrho
–0.53
–16.7*
–0.29
–3.3*
–0.18
–5.0*
/lnsigma
–0.35
–28.0*
–0.53
–26.6*
–0.49
–32.2*
Region capital dummy (omitted)
Wald test (rho = 0)
279.9*
0.7193
7.8*
10.80*
0.0955
1.0
25.21*
SOURCE: Authors, based on Multipurpose Household Survey. NOTE: * significant at the 1 percent level. ** significant at the 5 percent level.
positive impact on labor force participation, although the latter may decrease as one grows older. Also, having children younger than age 6 reduces the probability of women’s participation in labor markets, but not men’s. However, having children between 6 and 12 years old seems to reduce the probability of labor market participation for both men and women. Regional controls are all statistically significant and show that in the capital city labor participation is higher. The Wald test for the importance of the sample selection mechanism is also significant, indicating an improvement over the linear regression for consistency and bias of the parameter estimators. The result for the remittances dummy provides evidence that those receiving remittances have more discretion in participation in labor markets; they can take longer to search for jobs because they have remittances as a cushion, or they simply have higher reservation wages and take more time to find jobs. After considering sample selection, the results (upper portion of table 5.8) suggest that education has a positive effect on wages and age has a hyperbolic impact. Workers in urban areas and in the public sector enjoy much higher wages, while women have lower wages after controlling for other variables. Remittances have a positive effect on wages, indicating a positive impact on reservation wages. Remittances reduce labor market participation, but once a remittances-receiving worker decides to participate in the labor market, he or she closes the deal with a wage premium.