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Minimum Wage Effects in a Developing Country

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  • 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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Bibliographic Info

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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Keywords: minimum wage; labor costs; employment; informal sector; Brazil;

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References

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