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Minimum Wage Effects in a Developing Country

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Author Info
Sara Lemos ()

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Abstract

The available minimum wage literature, which is mostly based on US evidence, is not very useful for analyzing developing countries, where the minimum wage affects many more workers and labor institutions and law enforcement differ in important ways. The main contribution of this paper is to present new empirical evidence on minimum wage effects for a key developing country, Brazil. Using a monthly household survey panel from 1982 to 2000 we find evidence of a strong wage compression effect for both the formal and informal sectors. Furthermore, we find no evidence of adverse employment effects in either sector.

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File URL: http://www.le.ac.uk/economics/research/RePEc/lec/leecon/dp06-1.pdf
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Paper provided by Department of Economics, University of Leicester in its series Discussion Papers in Economics with number 06/1.

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Date of creation: Jan 2006
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Handle: RePEc:lec:leecon:06/1

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Postal: Department of Economics University of Leicester, University Road. Leicester. LE1 7RH. UK
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Related research
Keywords: minimum wage; labor costs; employment; informal sector; Brazil;

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Find related papers by JEL classification:
J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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References listed on IDEAS
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.:
  1. Meyer, Robert H & Wise, David A, 1983. "Discontinuous Distributions and Missing Persons: The Minimum Wage and Unemployed Youth," Econometrica, Econometric Society, vol. 51(6), pages 1677-98, November. [Downloadable!] (restricted)
    Other versions:
  2. Brown, Charles & Gilroy, Curtis & Kohen, Andrew, 1982. "The Effect of the Minimum Wage on Employment and Unemployment," Journal of Economic Literature, American Economic Association, vol. 20(2), pages 487-528, June. [Downloadable!] (restricted)
  3. Michael J. Pisani & José A. Pagán, 2004. "Sectoral Selection and Informality: a Nicaraguan Case Study," Review of Development Economics, Blackwell Publishing, vol. 8(4), pages 541-556, November. [Downloadable!] (restricted)
  4. David Neumark & William Wascher, 1992. "Employment effects of minimum and subminimum wages: Panel data on state minimum wage laws," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 46(1), pages 55-81, October.
  5. Edward M. Gramlich, 1976. "Impact of Minimum Wages on Other Wages, Employment, and Family Incomes," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 7(1976-2), pages 409-462. [Downloadable!]
  6. repec:bep:eapcon:v:4:y:2005:i:1:p:1425-1425 is not listed on IDEAS
  7. Brown, Charles, 1999. "Minimum wages, employment, and the distribution of income," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 32, pages 2101-2163 Elsevier. [Downloadable!] (restricted)
  8. Dickens, Richard & Machin, Stephen & Manning, Alan, 1999. "The Effects of Minimum Wages on Employment: Theory and Evidence from Britain," Journal of Labor Economics, University of Chicago Press, vol. 17(1), pages 1-22, January. [Downloadable!] (restricted)
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  9. Fabrizio Carmignani, 2003. "Political Instability, Uncertainty and Economics," Journal of Economic Surveys, Blackwell Publishing, vol. 17(1), pages 1-54, February. [Downloadable!] (restricted)
  10. Welch, Finis R & Cunningham, James, 1978. "Effects of Minimum Wages on the Level and Age Composition of Youth Employment," The Review of Economics and Statistics, MIT Press, vol. 60(1), pages 140-45, February. [Downloadable!] (restricted)
  11. Mincer, Jacob, 1976. "Unemployment Effects of Minimum Wages," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages S87-104, August. [Downloadable!] (restricted)
  12. Burkhauser, Richard V & Couch, Kenneth A & Wittenburg, David C, 2000. "A Reassessment of the New Economics of the Minimum Wage Literature with Monthly Data from the Current Population Survey," Journal of Labor Economics, University of Chicago Press, vol. 18(4), pages 653-80, October. [Downloadable!] (restricted)
  13. Mark B. Stewart, 2002. "Estimating the Impact of the Minimum Wage Using Geographical Wage Variation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(s1), pages 583-605, 08. [Downloadable!] (restricted)
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  14. Stephen Machin & Alan Manning & Lupin Rahman, 2003. "Where the Minimum Wage Bites Hard: Introduction of Minimum Wages to a Low Wage Sector," Journal of the European Economic Association, MIT Press, vol. 1(1), pages 154-180, 03. [Downloadable!] (restricted)
  15. Russell S. Sobel, 1999. "Theory and Evidence on the Political Economy of the Minimum Wage," Journal of Political Economy, University of Chicago Press, vol. 107(4), pages 761-785, August. [Downloadable!] (restricted)
  16. Williams, Nicolas, 1993. "Regional Effects of the Minimum Wage on Teenage Employment," Applied Economics, Taylor and Francis Journals, vol. 25(12), pages 1517-28, December.
  17. Francisco Carneiro, 2004. "Are Minimum Wages to Blame for Informality in the Labour Market?," Empirica, Springer, vol. 31(4), pages 295-306, December. [Downloadable!] (restricted)
  18. McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December. [Downloadable!] (restricted)
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  1. Arnab K. Basu & Nancy H. Chau & Ravi Kanbur, 2007. "Turning a Blind Eye: Costly Enforcement, Credible Commitment and Minimum Wage Laws," IZA Discussion Papers 2998, Institute for the Study of Labor (IZA). [Downloadable!]
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