The impact on inequality of raising the minimum wage: Gap- narrowing and reranking effects
Raising the minimum wage may reduce inequality by increasing the wages of low-skill workers, but it may also increase inequality due to negative impacts on employment that produce wage losses. Using estimates of the elasticities of wages and employment to changes in the minimum wage in Colombia and Brazil, we show that the net impact on inequality of increasing the minimum wage may depend on the distributional weights used for inequality measurement. The results are obtained by decomposing the Gini index into reranking and gap-narrowing Effects. Inequality increasing reranking effects, which are associated to job losses, may dominate inequality decreasing gap-narrowing effects, which are associated with wage gains, when high weights are placed on workers with low earnings. For standard distributional weights however, the net impact is a reduction in wage inequality.
|Date of creation:||08 Oct 2003|
|Contact details of provider:|| |
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.:
- Jairo NUÑEZ MENDEZ & Roberto STEINER & Ximena CADENA & Renata PARDO, 2002.
"¿Cuáles colegios ofrecen mejor educación en Colombia?,"
ARCHIVOS DE ECONOMÍA
003795, DEPARTAMENTO NACIONAL DE PLANEACIÓN.
- Jairo Núñez & Roberto Steiner & Ximena Cadena & Renata Pardo, 2002. "¿Cuáles Colegios Ofrecen Mejor Educación En Colombia?," DOCUMENTOS CEDE 003796, UNIVERSIDAD DE LOS ANDES-CEDE.
- Roberto Steiner & Jairo Núñez M. & Ximena Cadena O. & Renata Pardo P., 2002. "¿Cuáles colegios ofrecen mejor educación en Colombia?," COYUNTURA SOCIAL 012943, FEDESARROLLO.
- Juan Carlos ECHEVERRY GARZON, 2002. "El siglo del modelo de desarrollo," ARCHIVOS DE ECONOMÍA 002552, DEPARTAMENTO NACIONAL DE PLANEACIÓN.
- Andrés ESCOBAR ARANGO & Gustavo Adolfo HERNANDEZ & Gabriel PIRAQUIVE & Juan Mauricio RAMIREZ, 2003. "Elementos para el análisis de incidencia tributaria," ARCHIVOS DE ECONOMÍA 002571, DEPARTAMENTO NACIONAL DE PLANEACIÓN.
- Javier A. Birchenall, 2007. "Income distribution and macroeconomics in Colombia," Journal of Income Distribution, Journal of Income Distribution, vol. 16(2), pages 6-24, June.
- Ortega, Juan Ricardo & Piraquive, Gabriel Armando & Hernandez, Gustavo Adolfo & Soto, Carolina & Prada, Sergio & Ramirez, Juan Mauricio, 2000. "Incidencia fiscal de los incentivos tributarios
[Fiscal Incidence of tax incentives]," MPRA Paper 14016, University Library of Munich, Germany.
- Fernando MESA PARRA, 2001. "Strategic Trade Policy and Exchange Rate Uncertainty," ARCHIVOS DE ECONOMÍA 003527, DEPARTAMENTO NACIONAL DE PLANEACIÓN.
- Castro Carlos Alberto, 2001. "Eficiencia-X en el sector bancario colombiano," REVISTA DESARROLLO Y SOCIEDAD, UNIVERSIDAD DE LOS ANDES-CEDE, September.
- Carlos Alberto CASTRO, 2004. "Eficiencia -X en el sector bancario colombiano," ARCHIVOS DE ECONOMÍA 002439, DEPARTAMENTO NACIONAL DE PLANEACIÓN.
- Francisco Javier LASSO VALDERRAMA, 2002. "Economías de escala en los hogares y pobreza," ARCHIVOS DE ECONOMÍA 002399, DEPARTAMENTO NACIONAL DE PLANEACIÓN. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:col:000118:003602. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bricelda Delgado Martínez)
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.