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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

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 anti-inflation policy in addition to its social role. This paper estimates the effects of the minimum wage on both wages and employment using panel data techniques and 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. (2) An employment decomposition that separately estimates the effect of the minimum wage on hours worked and on the number of jobs is used. (3) Robustness checks accounting for sorting into the informal and public sectors are performed. 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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File URL: http://128.118.178.162/eps/lab/papers/0403/0403009.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Labor and Demography with number 0403009.

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Length: 25 pages
Date of creation: 04 Mar 2004
Date of revision:
Handle: RePEc:wpa:wuwpla:0403009

Note: Type of Document - pdf; prepared on win98; pages: 25
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Web page: http://128.118.178.162

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

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References

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Citations

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Cited by:
  1. Carmen Pagés-Serra, 2005. "Diagnóstico del mercado de trabajo en Uruguay," IDB Publications 21778, Inter-American Development Bank.
  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.
  3. Neumark, David & Cunningham, Wendy & Siga, Lucas, 2006. "The effects of the minimum wage in Brazil on the distribution of family incomes: 1996-2001," Journal of Development Economics, Elsevier, vol. 80(1), pages 136-159, June.

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