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Political Variables as Instruments for the Minimum Wage

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  • Sara Lemos

    (UCL, Londres)

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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Paper provided by ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics] in its series Anais do XXXI Encontro Nacional de Economia [Proceedings of the 31th Brazilian Economics Meeting] with number f08.

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Date of creation: 2003
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Handle: RePEc:anp:en2003:f08

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Citations

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Cited by:
  1. Lemos, Sara, 2004. "The Effect of the Minimum Wage on Prices in Brazil," IZA Discussion Papers 1071, Institute for the Study of Labor (IZA).
  2. Sara lemos, 2004. "The Effects of the Minimum Wage on Wages, Employment and Prices," Discussion Papers in Economics 04/10, Department of Economics, University of Leicester.
  3. 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.
  4. Hanna Frings, 2012. "The Employment Effect of Industry-Specific, Collectively-Bargained Minimum Wages," Ruhr Economic Papers 0348, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  5. Lemos, Sara, 2009. "Minimum wage effects in a developing country," Labour Economics, Elsevier, vol. 16(2), pages 224-237, April.
  6. Sara Lemos, 2004. "A Menu of Minimum Wage Variables for Evaluating Wages and Employment Effects: Evidence from Brazil," Discussion Papers in Economics 04/3, Department of Economics, University of Leicester.
  7. David Neumark & William Wascher, 2006. "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research," NBER Working Papers 12663, National Bureau of Economic Research, Inc.
  8. Sen, Anindya & Rybczynski, Kathleen & Van De Waal, Corey, 2011. "Teen employment, poverty, and the minimum wage: Evidence from Canada," Labour Economics, Elsevier, vol. 18(1), pages 36-47, January.
  9. 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.
  10. Jellal, Mohamed, 2012. "Maroc salaire minimum emploi et pauvreté
    [Morocco minimum wage employment and poverty]
    ," MPRA Paper 38491, University Library of Munich, Germany.

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