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The impact of minimum wage legislation in developing countries where coverage is incomplete

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  • Patricia Jones

Abstract

This paper examines the impact of minimum wage legislation in developing countries where coverage is incomplete. Using a rich data set from Ghana, it estimates the extent to which a binding minimum wage alters employment in both the formal and informal sectors of the labor market. The data reveal that Ghana’s minimum wage policies during the 1970s and 1980s led to a reduction of formal sector jobs and an increase in informal sector jobs. In addition, there is some evidence to suggest that a large proportion of the displaced workers from the formal sector ended up working in the informal sector.

Suggested Citation

  • Patricia Jones, 1998. "The impact of minimum wage legislation in developing countries where coverage is incomplete," CSAE Working Paper Series 1998-02, Centre for the Study of African Economies, University of Oxford.
  • Handle: RePEc:csa:wpaper:1998-02
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    File URL: http://www.csae.ox.ac.uk/materials/papers/9802text.pdf
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    References listed on IDEAS

    as
    1. Alida Castillo Freeman & Richard B. Freeman, 1991. "Minimum Wages in Puerto Rico: Textbook Case of a Wage Floor?," NBER Working Papers 3759, National Bureau of Economic Research, Inc.
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    More about this item

    JEL classification:

    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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