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Minimum Wage Policy and Employment Effects: Evidence from Brazil

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  • Sara Lemos

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Abstract

The international literature on minimum wages greatly lacks empirical evidence for Latin America. In Brazil, not only are minimum wage increases large and frequent, but they also have been used as both a social policy and an anti-inflationary policy. This paper estimates the effects of the minimum wage on wages and employment using panel data techniques and Brazilian monthly household data from 1982 to 2000. A number of conceptual and identification questions are discussed. For example, the paper summarizes various strategies on how best to measure the effect of a constant (national) minimum wage, presenting a menu of minimum wage variables that are then used to estimate wage and employment effects. The paper also uses an employment decomposition that separately estimates the effect of the minimum wage on hours per worker and on the number of jobs. Robust results indicate that an increase in the minimum wage strongly compresses the wages distribution with small adverse effects on employment.

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File URL: http://www.brookings.edu/press/Journals/2005/economiafall2004.aspx
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Bibliographic Info

Article provided by LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION in its journal JOURNAL OF LACEA ECONOMIA.

Volume (Year): (2004)
Issue (Month): ()
Pages:

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Handle: RePEc:col:000425:008666

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Related research

Keywords: minimum wage; wage effect; employment effect; labor costs; Brazil;

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Cited by:
  1. Sara Lemos, 2006. "Anticipated effects of the minimum wage on prices," Applied Economics, Taylor & Francis Journals, vol. 38(3), pages 325-337.
  2. Nguyen Viet, Cuong, 2010. "The Impact of a Minimum Wage Increase on Employment, Wages and Expenditures of Low-Wage Workers in Vietnam," MPRA Paper 36751, University Library of Munich, Germany, revised 15 Aug 2011.
  3. David Neumark & William Wascher, 2006. "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research," Working Papers 060708, University of California-Irvine, Department of Economics, revised Jan 2007.
  4. Freeman, Richard B., 2010. "Labor Regulations, Unions, and Social Protection in Developing Countries," Handbook of Development Economics, Elsevier.
  5. Lemos, Sara, 2009. "Minimum wage effects in a developing country," Labour Economics, Elsevier, vol. 16(2), pages 224-237, April.
  6. Anita Alves Pena, 2013. "Do Minimum Wage Laws Affect People Who Are Not Covered? Evidence from Documented and Undocumented, Hourly and Piece Rate Workers in U.S. Agriculture," Upjohn Working Papers and Journal Articles 13-194, W.E. Upjohn Institute for Employment Research.
  7. Fernando Borraz & Nicolás Gonzalez Pampillón, 2011. "Assessing the Distributive Impact of More than Doubling the Minimum Wage: The Case of Uruguay," Documentos de Trabajo (working papers) 1711, Department of Economics - dECON.

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