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Minimum Wages and Labor Supply in an Emerging Market: The Case of Mauritius

Author

Listed:
  • Haroon Bhorat
  • Zaakir Asmal
  • Ravi Kanbur
  • Marco Ranzani
  • Pierella Paci

    (University of Cape Town
    Director)

Abstract

This paper investigates the effect of multiple minimum wages, known as Remuneration Orders, on employment and working hours in Mauritius. Using data between 2004 and 2014, the analysis indicates that a 10 percent increase in the minimum wages brings about a slightly positive effect on employment in the covered sector, with an estimated employment elasticity of 0.113, which is within the range of elasticities found in previous studies of employment effects of minimum wages in low and middle income (LMI) countries. The positive employment effect of minimum wages is also associated with a 2.3 percent increase in average working hours for men, but a 1.8 percent decline in average working hours for women in the covered sector. In the uncovered sector, the significant positive effect along the intensive margin, estimated at 4.2 percent, is driven by changes in labor supply among men.

Suggested Citation

  • Haroon Bhorat & Zaakir Asmal & Ravi Kanbur & Marco Ranzani & Pierella Paci, 2019. "Minimum Wages and Labor Supply in an Emerging Market: The Case of Mauritius," Working Papers 201901, University of Cape Town, Development Policy Research Unit.
    • Handle: RePEc:ctw:wpaper:201901
    as

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    References listed on IDEAS

    as
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    Cited by:

    1. Ravi Kanbur, 2019. "Inequality in a global perspective," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 35(3), pages 431-444.
    2. David Neumark & Luis Felipe Munguia Corella, 2019. "Do Minimum Wages Reduce Employment in Developing Countries? A Survey and Exploration of Conflicting Evidence," NBER Working Papers 26462, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    Minimum Wages; Employment; Hours of Work; Mauritius;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • 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

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