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A Menu of Minimum Wage Variables for Evaluating Wages and Employment Effects: Evidence from Brazil

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  • Sara Lemos

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Abstract

The international literature on minimum wage greatly lacks empirical evidence from developing countries. Brazil’s minimum wage policy is a distinctive and central feature of the Brazilian economy. Not only are increases in the minimum wage large and frequent but also the minimum wage has been used as an anti-inflation policy in addition to its social role. This study estimates the effects of the minimum wage on both wages and employment using panel data techniques and Brazilian monthly household data from 1982 to 2000 at individual and regional levels. A number of conceptual and identification questions is discussed, for example: (1) Various strategies on how to best measure the effect of a constant (national) minimum wage are summarized in a “menu” of minimum wage variables and used to estimate wage and employment effects. (2) An employment decomposition that separately estimates the effect of the minimum wage on hours worked and on the number of jobs is used. Robust results indicate that an increase in the minimum wage strongly compresses the wages distribution with moderately small adverse effects on employment.

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Bibliographic Info

Paper provided by Department of Economics, University of Leicester in its series Discussion Papers in Economics with number 04/3.

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Date of creation: Feb 2004
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Handle: RePEc:lec:leecon:04/3

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Keywords: minimum wage; wage effect; employment effect; informal sector; public sector; Brazil;

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References

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  33. repec:fth:prinin:300 is not listed on IDEAS
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Cited by:
  1. David Neumark & Wendy Cunningham & Lucas Siga, 2004. "The Effects of the Minimum Wage in Brazil on the Distribution of Family Incomes: 1996-2001," Working Papers 050627, University of California-Irvine, Department of Economics.
  2. Calavrezo, Oana & Pelek, Selin, 2011. "Qui sont les salariés payés au niveau du salaire minimum? Une analyse empirique à partir de données turques," GIAM Working Papers 11-2, Galatasaray University Economic Research Center, revised 13 Feb 2011.

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