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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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Related research
Keywords: minimum wage labor costs employment informal sector Brazil

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. Pablo Fajnzylber, 2001. "Minimum Wage Effects Throughout the Wage Distribution: Evidence from Brazil's Formal and Informal Sectors," Anais do XXIX Encontro Nacional de Economia [Proceedings of the 29th Brazilian Economics Meeting] 098, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics]. [Downloadable!]
  5. 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.
  6. 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!]
  7. Sara Lemos, 2005. "Political Variables as Instruments for the Minimum Wage," Contributions to Economic Analysis & Policy, Berkeley Electronic Press, vol. 4(1), pages 1425-1425. [Downloadable!] (restricted)
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  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. T.H. Gindling & Katherine Terrell, 2004. "Legal Minimum Wages and the Wages of Formal and Informal Sector Workers in Costa Rica," William Davidson Institute Working Papers Series 2004-647, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
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  12. 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)
  13. 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)
  14. Maloney, William F, 1999. "Does Informality Imply Segmentation in Urban Labor Markets? Evidence from Sectoral Transitions in Mexico," World Bank Economic Review, Oxford University Press, vol. 13(2), pages 275-302, May.
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  16. 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)
  17. 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)
  18. 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.
  19. 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)
  20. 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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(explanations, 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. 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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