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Can minimum wages contribute to poverty reduction in poor countries?

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  • Stephen Devereux

    (Institute of Development Studies, University of Sussex, Brighton, UK)

Abstract

Minimum wage legislation aims to reduce poverty by raising the wages of the poorest workers towards or above the poverty line. Despite their intuitive appeal, minimum wages are controversial. The sceptics' argument that raising wages will create disemployment is compounded by the difficulties of enforcing compliance, particularly in poor countries with large informal sectors and weak public administrations. This paper draws on the 'new economics' of the minimum wage, and reviews evidence from several countries suggesting that positive impacts are achievable with negligible side-effects. The paper concludes by making a case for introducing selective minimum wages on Uganda's agricultural estates. Copyright © 2005 John Wiley & Sons, Ltd.

Suggested Citation

  • Stephen Devereux, 2005. "Can minimum wages contribute to poverty reduction in poor countries?," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(7), pages 899-912.
    • Handle: RePEc:wly:jintdv:v:17:y:2005:i:7:p:899-912
    DOI: 10.1002/jid.1183
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    References listed on IDEAS

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    Cited by:

    1. Gerry Rodgers, 2007. "Labour Market Flexibility and Decent Work," Working Papers 47, United Nations, Department of Economics and Social Affairs.
    2. Alexandros Karakitsios & Manos Matsaganis, 2018. "Minimum Wage Effects on Poverty and Inequality," DEOS Working Papers 1801, Athens University of Economics and Business.
    3. Arvind Ashta, 2017. "Work-sharing from Different Angles: A literature review," Working Papers CEB 17-033, ULB -- Universite Libre de Bruxelles.
    4. Caren A. Grown, 2006. "Quick Impact Initiatives For Gender Equality: A Menu of Options," Economics Working Paper Archive wp_462, Levy Economics Institute.
    5. Andalón, Mabel & Pagés, Carmen, 2008. "Minimum Wages in Kenya," IZA Discussion Papers 3390, Institute of Labor Economics (IZA).
    6. Rania Antonopoulos, 2007. "The Right to a Job, the Right Types of Projects: Employment Guarantee Policies from a Gender Perspective," Economics Working Paper Archive wp_516, Levy Economics Institute.
    7. Ham, Andrés, 2018. "The Consequences of Legal Minimum Wages in Honduras," World Development, Elsevier, vol. 102(C), pages 135-157.

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