This paper estimates the impact of recent minimum wage adjustments on poverty level for the six major Brazilian metropolitan areas. We make a decomposition of the observed variation on poverty level registered for a sample of longitudinal data based on a monthly employment survey (PME/IBGE). According to the decomposition we point the share of the observed variation on poverty level due to the wage and ocupational status variation of workers affected by the minimum legislation. We break the decomposition in several steps to be able to consider several alternatives of the group of workers affected by the minimum wage legislation. We have evidences of significant impacts of minimum wage on poverty level for metropolitan areas. The medium elasticity for the period analyzed (1995/1998) was approximately –0.4, when this effect is incorporated, which means that in the very short-run poverty rises in Brazilian metropolitan areas when the value of the minimum wage is increased.
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Article provided by ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics] in its journal Economia.
Volume (Year): 2 (2001) Issue (Month): 1 (January-June) Pages: 47-71 Download reference. The following formats are available: HTML
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Handle: RePEc:anp:econom:v:2:y:2001:i:1:p:47-71
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Find related papers by JEL classification: J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General D60 - Microeconomics - - Welfare Economics - - - General
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