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Does increasing the minimum wage reduce poverty in developing countries?

Listed author(s):
  • T. H. Gindling

    (University of Maryland, USA, and IZA, Germany)

Registered author(s):

    Do minimum wage policies reduce poverty in developing countries? It depends. Raising the minimum wage could increase or decrease poverty, depending on labor market characteristics. Minimum wages target formal sector workers—a minority of workers in most developing countries—many of whom do not live in poor households. Whether raising minimum wages reduces poverty depends not only on whether formal sector workers lose jobs as a result, but also on whether low-wage workers live in poor households, how widely minimum wages are enforced, how minimum wages affect informal workers, and whether social safety nets are in place.

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    Article provided by Institute for the Study of Labor (IZA) in its journal IZA World of Labor.

    Volume (Year): (2014)
    Issue (Month): (May)
    Pages: 1-30

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    Handle: RePEc:iza:izawol:journl:y:2014:n:30
    Contact details of provider: Postal:
    IZA, P.O. Box 7240, D-53072 Bonn, Germany

    Fax: +49 228 3894 180
    Web page: http://www.iza.org

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    1. Haroon Bhorat & Ravi Kanbur & Natasha Mayet, 2013. "The impact of sectoral minimum wage laws on employment, wages, and hours of work in South Africa," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-27, December.
    2. 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.
    3. Gindling, T.H. & Terrell, Katherine, 2010. "Minimum Wages, Globalization, and Poverty in Honduras," World Development, Elsevier, vol. 38(6), pages 908-918, June.
    4. Alaniz, Enrique & Gindling, T.H. & Terrell, Katherine, 2011. "The impact of minimum wages on wages, work and poverty in Nicaragua," Labour Economics, Elsevier, vol. 18(S1), pages 45-59.
    5. David Neumark & DMark Schweitzer & DaWilliam Wascher, 2004. "Minimum Wage Effects throughout the Wage Distribution," Journal of Human Resources, University of Wisconsin Press, vol. 39(2).
    6. Lustig, N. & Mcleod, D., 1996. "Minimum Wages and Poverty in Developing Countries : Some Empirical Evidence," Papers 125, Brookings Institution - Working Papers.
    7. Wendy Cunningham, 2007. "Minimum Wages and Social Policy : Lessons from Developing Countries," World Bank Publications, The World Bank, number 6760.
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