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Minimum Wages and Poverty in Developing Countries : Some Empirical Evidence

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Author Info

  • Lustig, N.
  • Mcleod, D.

Abstract

This paper examines the relationship between minimum wages and poverty in developing countries. We regress changes in poverty indicators for a group of developing countries on minimum wage changes, changes in public spending, human capital investment and other variables associated with changes in poverty. We find that higher minimum wages are associated with lower levels of poverty. This result is replicated across a range of poverty measures and country groupings. Higher minimum wages are also associated with higher unemployment, so the potential reduction in poverty is not costless from an efficiency point of view.

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Bibliographic Info

Paper provided by Brookings Institution - Working Papers in its series Papers with number 125.

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Length: 22 pages
Date of creation: 1996
Date of revision:
Handle: RePEc:fth:brooki:125

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Postal: THE BROOKINGS INSTITUTION, 1775 MASSACHUSETTS AVE N.W. WASHINGTON D.C. 20036 U.S.A.
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Web page: http://www.brook.edu/
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Keywords: MINIMUM WAGE ; POVERTY ; DEVELOPING COUNTRIES;

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