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The Effects of the Minimum Wage on Employment and Wages

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  • Nicolás Grau
  • Jorge Miranda
  • Esteban Puentes

Abstract

The effect of the minimum wage on labor market outcomes is controversial. There are several studies for developed countries with mixed results, but there is a lack of evidence for developing countries. We have access to a panel of workers from the unemployment insurance system in Chile, which allow us to study the effect of four consecutive increases in minimum wages using administrative data. We use several definitions of treatment and control groups, finding consistently a small and positive effect of the minimum wage on formal wages, and non-significant effects on formal employment.

Suggested Citation

  • Nicolás Grau & Jorge Miranda & Esteban Puentes, 2018. "The Effects of the Minimum Wage on Employment and Wages," Working Papers wp466, University of Chile, Department of Economics.
    • Handle: RePEc:udc:wpaper:wp466
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    Cited by:

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    2. Campos Vázquez, Raymundo Miguel & Rodas Milián, James Alexis, 2020. "El efecto faro del salario mínimo en la estructura salarial: evidencias para México," El Trimestre Económico, Fondo de Cultura Económica, vol. 87(345), pages 51-97, enero-mar.
    3. Pablo Blanchard & Paula Carrasco & Rodrigo Ceni & Cecilia Parada & Sofía Santín, 2021. "Distributive and displacement effects of a coordinated wage bargaining scheme," Documentos de Trabajo (working papers) 21-26, Instituto de Economía - IECON.
    4. Carlo Lombardo & Lucía Ramirez-Veira & Leonardo Gasparini, 2022. "Does the Minimum Wage Affect Wage Inequality? A Study for the Six Largest Latin American Economies," CEDLAS, Working Papers 0302, CEDLAS, Universidad Nacional de La Plata.

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