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The Minimum Wage In Colombia1984-2001: Favoring The Middle Class With A Bite On The Poor

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Author Info

  • CARLOS A. ARANGO

    ()

  • ANGÉLICA PACHÓN

    ()

Abstract

This paper exploits the long history of the minimum wage in Colombia in order to see whether it has im-proved the living conditions of low income families and reduced income inequality. This paper also ex-plores how the minimum wage may have distorted market outcomes in the process. We fi nd signifi cant negative minimum wage effects on both the likeli-hood of being employed and hours worked among household heads. The negative effect is strongest for women, the young and less educated people. For non-head household members, we fi nd that a rise in the minimum wage signifi cantly increases labor participation, reduces hours worked, and increases the likelihood of being unemployed. Most impor-tantly, we fi nd evidence that the minimum wage ends up being regressive, improving the living con-ditions of families in the middle and the upper parts of the income distribution but causing net losses for those at the bottom.

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File URL: http://www.banrep.gov.co/sites/default/files/publicaciones/archivos/espe_055-5.pdf
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Bibliographic Info

Article provided by BANCO DE LA REPÚBLICA - ESPE in its journal ENSAYOS SOBRE POLÍTICA ECONÓMICA.

Volume (Year): (2007)
Issue (Month): ()
Pages:

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Handle: RePEc:col:000107:004649

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Related research

Keywords: minimum wage; income distribution; income inequality; poverty alleviation.;

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  1. Lustig, N. & Mcleod, D., 1996. "Minimum Wages and Poverty in Developing Countries : Some Empirical Evidence," Papers 125, Brookings Institution - Working Papers.
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Cited by:
  1. Juan José Echavarría & Enrique López & Sergio Ocampo & Norberto Rodríguez, 2011. "Choques, instituciones laborales y desempleo en Colombia," ENSAYOS SOBRE POLÍTICA ECONÓMICA, BANCO DE LA REPÚBLICA - ESPE.

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