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Political Variables as Instruments for the Minimum Wage

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Author Info
Sara Lemos (University of Leicester)

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Abstract

A number of recent empirical studies have found no evidence that the minimum wage adversely affects employment. Explanations for such non-negative estimates include new theoretical approaches, empirical identification and data issues. In this paper we examine the robustness of such estimates to concerns about bias arising from the simultaneous determination of employment and the minimum wage. We use a number of novel political variables as instruments to control for this source of endogeneity. We exploit the personal characteristics of the politicians voting on minimum wage bills, their voting behavior and their electoral process. Our main conclusion is that the weak relationship between minimum wages and employment does not appear to be driven by endogeneity.

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Publisher Info
Article provided by Berkeley Electronic Press in its journal Contributions to Economic Analysis & Policy.

Volume (Year): 4 (2005)
Issue (Month): 1 ()
Pages: 1425-1425
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Handle: RePEc:bep:eapcon:v:4:y:2005:i:1:p:1425-1425

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Related research
Keywords: minimum wage labour costs political variables instrumental variables Brazil

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Find related papers by JEL classification:
J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

References listed on IDEAS
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    Other versions:
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    Other versions:
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Sara lemos, 2004. "The Effects of the Minimum Wage in the Formal and Informal Sectors in Brazil," Discussion Papers in Economics 04/8, Department of Economics, University of Leicester. [Downloadable!]
    Other versions:
  2. Sara Lemos, 2005. "Minimum Wage Effects on Wages, Employment and Prices: Implications for Poverty Alleviation in Brazil," Discussion Papers in Economics 05/15, Department of Economics, University of Leicester. [Downloadable!]
  3. Sara lemos, 2004. "The Effects of the Minimum Wage in the Private and Public Sectors in Brazil," Discussion Papers in Economics 04/12, Department of Economics, University of Leicester. [Downloadable!]
  4. Sara Lemos, 2004. "The Effects of the Minimum Wage on Prices in Brazil," Labor and Demography 0403011, EconWPA. [Downloadable!]
    Other versions:
  5. Lemos, Sara, 2004. "The Effects of the Minimum Wage on Wages, Employment and Prices," IZA Discussion Papers 1135, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  6. Sara Lemos, 2005. "How Do Alternative Minimum Wage Variables Compare?," Discussion Papers in Economics 05/6, Department of Economics, University of Leicester. [Downloadable!]
  7. Sara Lemos, 2004. "A Menu Of Minimum Wage Variables For Evaluating Wages and Employment Effects: Evidence From Brazil," Labor and Demography 0403009, EconWPA. [Downloadable!]
    Other versions:
  8. Sara Lemos, 2006. "Minimum Wage Effects in a Developing Country," Discussion Papers in Economics 06/1, Department of Economics, University of Leicester. [Downloadable!]
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