The intertemporal relation between economic growth, total hours worked, and labor income of salaried and non-salaried workers in Colombia

Economic growth does not necessarily improve the welfare of all workers. In Colombia, for instance, total hours worked, and labor income increased much faster for salaried workers than for non-salaried workers following the recovery from the pandemic-induced recession of 2020. An estimated Vector Error Correction model suggests that economic growth increases the total hours worked by salaried workers and the labor income of non-salaried workers in the short term. In the long term, however, estimates indicate a strong, inelastic relationship between economic growth and the total hours worked and labor income of salaried and non-salaried workers, with the former experiencing much larger increases. In other words, economic growth seems to benefit salaried workers much more than non-salaried workers.