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Minimum Wage Effects in a Developing Country

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  • Sara Lemos

Abstract

The available minimum wage literature, which is mostly based on US evidence, is not very useful for analyzing developing countries, where the minimum wage affects many more workers and labor institutions and law enforcement differ in important ways. The main contribution of this paper is to present new empirical evidence on minimum wage effects for a key developing country, Brazil. Using a monthly household survey panel from 1982 to 2000 we find evidence of a strong wage compression effect for both the formal and informal sectors. Furthermore, we find no evidence of adverse employment effects in either sector.

Suggested Citation

  • Sara Lemos, 2006. "Minimum Wage Effects in a Developing Country," Discussion Papers in Economics 06/1, Division of Economics, School of Business, University of Leicester.
    • Handle: RePEc:lec:leecon:06/1
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    More about this item

    Keywords

    minimum wage; labor costs; employment; informal sector; Brazil;
    All these keywords.

    JEL classification:

    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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