IDEAS home Printed from https://ideas.repec.org/a/taf/jdevst/v60y2024i4p494-510.html

Does the Minimum Wage Affect Wage Inequality? A Study for the Six Largest Latin American Economies

Author

Listed:
  • Carlo Lombardo
  • Lucía Ramírez Leira
  • Leonardo Gasparini

Abstract

Minimum wage (MW) policies are widespread in the developing world and yet their effects are still unclear. In this paper we explore the effect of national MW policies in Latin America’s six largest economies by exploiting the heterogeneity in the bite of the national minimum wage across local labor markets and over time. We find evidence that the MW has a compression effect on the wage distribution of formal workers. The effect was particularly large during the 2000s, a decade of sustained growth and strong labor markets. In contrast, the effect seems to vanish in the 2010s, a decade of much weaker labor markets. We also find suggestive evidence of a lighthouse effect: the MW seems to have an equalizing effect also on the wage distribution of informal workers.

Suggested Citation

  • Carlo Lombardo & Lucía Ramírez Leira & Leonardo Gasparini, 2024. "Does the Minimum Wage Affect Wage Inequality? A Study for the Six Largest Latin American Economies," Journal of Development Studies, Taylor & Francis Journals, vol. 60(4), pages 494-510, April.
    • Handle: RePEc:taf:jdevst:v:60:y:2024:i:4:p:494-510
    DOI: 10.1080/00220388.2024.2312833
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00220388.2024.2312833
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00220388.2024.2312833?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. No title
      by maximorossi in NEP-LTV blog on 2022-09-20 20:20:13

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nicolás González-Pampillón & Javier Vázquez-Grenno & Universitat de Barcelona & IEB, 2025. "Minimum wages and low wage workers: Compliance asnon-employment margin," Working Papers 2025/06, Institut d'Economia de Barcelona (IEB).
    2. Puig, Julian & Gasparini, Leonardo & Puig, Jorge, 2025. "Measuring energy poverty in Argentina: The relevance of regional disparities and policies," Utilities Policy, Elsevier, vol. 97(C).
    3. repec:aep:anales:4687 is not listed on IDEAS
    4. Oswaldo Mena Aguilar, 2025. "Chasing the Polar Star? Partisanship and the Political Drivers of Pre-distribution and Redistribution in Latin America," LIS Working papers 902, LIS Cross-National Data Center in Luxembourg.
    5. Lucía Ramírez Leira & Carlo Lombardo & Leonardo Gasparini, 2025. "Wage Floors Set in Collective Bargaining: Evidence on Wages and Employment in Argentina," CEDLAS, Working Papers 0353, CEDLAS, Universidad Nacional de La Plata.
    6. Nicolas Gonzalez-Pampillon & Javier Vazquez-Grenno, 2025. "Minimum wages and low wage workers: Compliance as non-employment margin," CEP Discussion Papers dp2096, Centre for Economic Performance, LSE.

    More about this item

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:jdevst:v:60:y:2024:i:4:p:494-510. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/FJDS20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.