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Do minimum wage hikes lead to employment destruction? Evidence from a regression discontinuity design in Argentina

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  • Abbate, Nicolás
  • Jiménez, Bruno

Abstract

In this study, we examine the impact of eight minimum wage increases in Argentina during the early 21st century by analyzing administrative records of registered employment. Utilizing a regression discontinuity design, we compare job separation rates between a group affected by the minimum wage hikes and a control group slightly out of their legal scope. Our findings indicate that, overall, these minimum wage hikes had no significant impact on separation rates. However, the 2008 increase triggered a 4.8 percentage point (19%) decrease in separations, casting doubt on the disemployment effects of minimum wages. Overall, these findings suggest that during economic upswings, minimum wage increases may have little to no adverse impact on job destruction.

Suggested Citation

  • Abbate, Nicolás & Jiménez, Bruno, 2026. "Do minimum wage hikes lead to employment destruction? Evidence from a regression discontinuity design in Argentina," Journal of Development Economics, Elsevier, vol. 178(C).
    • Handle: RePEc:eee:deveco:v:178:y:2026:i:c:s0304387825001099
    DOI: 10.1016/j.jdeveco.2025.103558
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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J80 - Labor and Demographic Economics - - Labor Standards - - - General
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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