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A Menu Of Minimum Wage Variables For Evaluating Wages and Employment Effects: Evidence From Brazil

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Author Info
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 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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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
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Handle: RePEc:wpa:wuwpla:0403009

Note: Type of Document - pdf; prepared on win98; pages: 25
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Keywords: minimum wage wage effect employment effect 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.:
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    Other versions:
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    Other versions:
  19. Sara Lemos, 2003. "Political Variables as Instruments for the Minimum Wage," Anais do XXXI Encontro Nacional de Economia [Proceedings of the 31th Brazilian Economics Meeting] f08, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics]. [Downloadable!]
    Other versions:
  20. David Card, 1992. "Using regional variation in wages to measure the effects of the federal minimum wage," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 46(1), pages 22-37, October.
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    Other versions:
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  32. David Neumark & William Wascher, 2000. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Comment," American Economic Review, American Economic Association, vol. 90(5), pages 1362-1396, December. [Downloadable!] (restricted)
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    Other versions:
  37. Thomas R. Michl, 2000. "Can Rescheduling Explain the New Jersey Minimum Wage Studies?," Eastern Economic Journal, Eastern Economic Association, vol. 26(3), pages 265-276, Summer. [Downloadable!]
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Cited by:
(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. 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. [Downloadable!]
    Other versions:
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