Minimum Wages in Colombia: Holding the Middle With a Bite on the Poor
AbstractThis paper exploits the long history of the minimum wage in a relatively stable developing economy like Colombia in order to see whether it may alleviate the living conditions of low income families and reduce income inequality. The paper does not only explore how the minimum wage may serve these purposes, but also how it may distort market outcomes to do so. We found significant negative minimum wage effects on both the likelihood of being employed and hours worked for all family members, being it stronger for women, and the young and less educated people. We also found a positive effect on non-head participation especialilly in families with low human capial. But, more important, we found evidence that the minimum wage ends up being regressive, improving the living conditions of families in the middle and the upper part of the income distribution with net losses for those at the bottom.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Banco de la Republica de Colombia in its series Borradores de Economia with number 280.
Date of creation:
Date of revision:
Minimum wage; income distribution; income inequality; public policy.;
Find related papers by JEL classification:
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
- J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-05-07 (All new papers)
- NEP-LAB-2005-05-07 (Labour Economics)
- NEP-LAM-2005-05-07 (Central & South America)
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.:
- Marcelo Neri & Gustavo Gonzaga & José Márcio Camargo, 1998.
"Efeitos informais do salário mínimo e pobreza,"
Textos para discussÃ£o
393, Department of Economics PUC-Rio (Brazil).
- Gonzaga, Gustavo & Camargo, José Márcio & Neri, Marcelo Cortes, 2000. "Efeitos Informais Do Salário Mínimo E Pobreza," Economics Working Papers (Ensaios Economicos da EPGE) 372, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
- David Card & Alan Krueger, 1993.
"Minimum Wages and Employment: A Case Study of the Fast Food Industry in New Jersey and Pennsylvania,"
694, Princeton University, Department of Economics, Industrial Relations Section..
- Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-93, September.
- David Card & Alan B. Krueger, 1993. "Minimum Wages and Employment: A Case Study of the Fast Food Industry in New Jersey and Pennsylvania," NBER Working Papers 4509, National Bureau of Economic Research, Inc.
- Donald Robertson & James Symons, 1991.
"Some Strange Properties of Panel Data Estimators,"
CEP Discussion Papers
dp0044, Centre for Economic Performance, LSE.
- William Maloney & Jairo Mendez, 2004.
"Measuring the Impact of Minimum Wages. Evidence from Latin America,"
in: Law and Employment: Lessons from Latin America and the Caribbean, pages 109-130
National Bureau of Economic Research, Inc.
- Maloney, William F. & Nunez, Jairo & Cunningham, Wendy & Fiess, Norbert & Montenegro, Claudio & Murrugarra, Edmundo & Santamaria,Mauricio & Sepulveda, Claudia, 2001. "Measuring the impact of minimum wages : evidence from Latin America," Policy Research Working Paper Series 2597, The World Bank.
- William F. Maloney & Jairo Nunez Mendez, 2003. "Measuring the Impact of Minimum Wages: Evidence from Latin America," NBER Working Papers 9800, National Bureau of Economic Research, Inc.
- Card, David & Krueger, Alan B, 1995. "Time-Series Minimum-Wage Studies: A Meta-analysis," American Economic Review, American Economic Association, vol. 85(2), pages 238-43, May.
- Azam, Jean-Paul, 1997. "Efficiency Wage and the Family: An Explanation for the Impact of the Agricultural Minimum Wage in Morocco," Kyklos, Wiley Blackwell, vol. 50(3), pages 369-82.
- Freeman, Richard B, 1996. "The Minimum Wage as a Redistributive Tool," Economic Journal, Royal Economic Society, vol. 106(436), pages 639-49, May.
- Alida Castillo Freeman & Richard B. Freeman, 1991. "Minimum Wages in Puerto Rico: Textbook Case of a Wage Floor?," NBER Working Papers 3759, National Bureau of Economic Research, Inc.
- Joshua Aizenman & Pierre-Richard AgÃ©nor, 1994.
"Macroeconomic Adjustment with Segmented Labor Markets,"
IMF Working Papers
94/56, International Monetary Fund.
- Agenor, Pierre-Richard & Aizenman, Joshua, 1999. "Macroeconomic adjustment with segmented labor markets," Journal of Development Economics, Elsevier, vol. 58(2), pages 277-296, April.
- Pierre-Richard Agenor & Joshua Aizenman, 1994. "Macroeconomic Adjustment with Segmented Labor Markets," NBER Working Papers 4769, National Bureau of Economic Research, Inc.
- Arellano, Manuel & Bond, Stephen, 1991.
"Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations,"
Review of Economic Studies,
Wiley Blackwell, vol. 58(2), pages 277-97, April.
- Tom Doan, . "RATS program to replicate Arellano-Bond 1991 dynamic panel," Statistical Software Components RTZ00169, Boston College Department of Economics.
- Richard V. Burkhauser & Kenneth A. Couch & David C. Wittenburg, 2000. "Who Minimum Wage Increases Bite: An Analysis Using Monthly Data from the SIPP and the CPS," Southern Economic Journal, Southern Economic Association, vol. 67(1), pages 16-40, July.
- Luis Eduardo Arango & Paula Herrera & Carlos Esteban Posada, .
"El salario mínimo: aspectos generales sobre los casos de Colombia y otros países,"
Borradores de Economia
436, Banco de la Republica de Colombia.
- Luis Eduardo Arango & Paula Herrera & Carlos Esteban Posada, 2008. "El salario mínimo: aspectos generales sobre los casos de Colombia y otros países," ENSAYOS SOBRE POLÍTICA ECONÓMICA, BANCO DE LA REPÚBLICA - ESPE.
- Paula Herrera & Luie Eduardo Arango & Carlos Estéban Posada, 2007. "El salario mínimo aspectos generales sobre los casos de Colombia y otros paises," DOCUMENTOS DE ECONOMÃA 003944, UNIVERSIDAD JAVERIANA - BOGOTÁ.
- Luis Eduardo Arango & Paula Herrera & Carlos Esteban Posada, 2007. "El salario mínimo: aspectos generales sobre los casos de Colombia y otros paises," BORRADORES DE ECONOMIA 002544, BANCO DE LA REPÚBLICA.
- Marc Hofstetter, 2006. "La política monetaria y la Corte Constitucional: el caso del salario mínimo," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 8(14), pages 105-124, January-J.
- Kapelyuk Sergey, 2014. "Impact of minimum wage on income distribution and poverty in Russia," EERC Working Paper Series 14/03e, EERC Research Network, Russia and CIS.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Camilo Millán).
If references are entirely missing, you can add them using this form.