Two Cities, Two Economies: Decomposing the Self-Employment Productivity Gap Between Quito and Guayaquil (Ecuador)

This research analyzes the income gap between self-employed workers in Quito and Guayaquil, Ecuador’s two largest urban labor markets. Using 2025 National Survey of Employment, Unemployment, and Underemployment (ENEMDU) data for 23,215 self-employed workers aged 25 to 65, the study combines Mincer regressions, quantile regressions, and Blinder–Oaxaca decomposition. Self-employed workers in Quito have hourly earnings approximately 13.9% higher than those in Guayaquil. The decomposition attributes 46.6% of the log-income gap to differences in observed characteristics, with education accounting for most of the explained component, while 53.4% remains unexplained. The unexplained component reflects differences in estimated coefficients as well as omitted or unobserved factors and should not be interpreted as a causal city effect. Education coefficients are larger in Quito in the city-specific regressions and across most quantiles. The results document substantial territorial heterogeneity in self-employment earnings and support the relevance of place-sensitive labor and entrepreneurship policies, while remaining descriptive rather than causal.

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Publication Details

Journal
Economies
Published
2026-10-13
DOI
https://doi.org/10.3390/economies14100471
Primary Topic
Labor market dynamics and wage inequality
Type
article
Field-Weighted Citation Impact
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article

Two Cities, Two Economies: Decomposing the Self-Employment Productivity Gap Between Quito and Guayaquil (Ecuador)

Juan T. Calderón Cisneros, Guido Omar Macas Acosta, Fidel Márquez Sánchez, Karem González Palma
Economies
Labor market dynamics and wage inequality
article

Two Cities, Two Economies: Decomposing the Self-Employment Productivity Gap Between Quito and Guayaquil (Ecuador)

Juan T. Calderón Cisneros, Guido Omar Macas Acosta, Fidel Márquez Sánchez, Karem González Palma
article en

Abstract

This research analyzes the income gap between self-employed workers in Quito and Guayaquil, Ecuador’s two largest urban labor markets. Using 2025 National Survey of Employment, Unemployment, and Underemployment (ENEMDU) data for 23,215 self-employed workers aged 25 to 65, the study combines Mincer regressions, quantile regressions, and Blinder–Oaxaca decomposition. Self-employed workers in Quito have hourly earnings approximately 13.9% higher than those in Guayaquil. The decomposition attributes 46.6% of the log-income gap to differences in observed characteristics, with education accounting for most of the explained component, while 53.4% remains unexplained. The unexplained component reflects differences in estimated coefficients as well as omitted or unobserved factors and should not be interpreted as a causal city effect. Education coefficients are larger in Quito in the city-specific regressions and across most quantiles. The results document substantial territorial heterogeneity in self-employment earnings and support the relevance of place-sensitive labor and entrepreneurship policies, while remaining descriptive rather than causal.

EconomiesVol. 14(10)
University of Guayaquil (EC), Universidad Espíritu Santo (EC), Universidad Ecotec (EC)
Openalex Percentile: Top 8%
Labor market dynamics and wage inequality
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