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Assessing the Distributive Impact of More than Doubling the Minimum Wage: The Case of Uruguay

Author Info

  • Fernando Borraz

    ()

    (Banco Central del Uruguay y Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)

  • Nicolás Gonzalez Pampillón

    ()

    (Universidad de Montevideo)

Abstract

This paper analyzes the role of the sharply increases in the minimum wage after 2004 in Uruguay in the slight decrease on wage inequality. We Önd no impact of the miminum wage increases on wage inequality. This results can be explained by the low starting level of the minimum wage or lack of compliance with it. The Uruguayan experience shows that the minimum wage is not always e§ective as a redistribution instrument.

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Paper provided by Department of Economics - dECON in its series Documentos de Trabajo (working papers) with number 1711.

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Length: 31 pages
Date of creation: Aug 2011
Date of revision:
Handle: RePEc:ude:wpaper:1711
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Keywords: minimum wage; wage inequality; IV; semiparametric estimation;

Find related papers by JEL classification:

  • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
  • 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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  1. Lemos Sara, 2005. "Political Variables as Instruments for the Minimum Wage," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-33, December.
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  6. Tito Boeri & Pietro Garibaldi & Marta Ribeiro, 2010. "The Lighthouse Effect and Beyond," Carlo Alberto Notebooks 193, Collegio Carlo Alberto.
  7. David Neumark & Wendy Cunningham & Lucas Siga, 2004. "The Effects of the Minimum Wage in Brazil on the Distribution of Family Incomes: 1996-2001," Working Papers 050627, University of California-Irvine, Department of Economics.
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  9. Mariano Bosch & Marco Manacorda, 2010. "Minimum Wages and Earnings Inequality in Urban Mexico," American Economic Journal: Applied Economics, American Economic Association, vol. 2(4), pages 128-49, October.
  10. Lemos, Sara, 2009. "Minimum wage effects in a developing country," Labour Economics, Elsevier, vol. 16(2), pages 224-237, April.
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  15. Christopher Flinn & James Mabli, 2008. "On-the-Job Search, Minimum Wages, and Labor Market Outcomes in an Equilibrium Bargaining Framework," Carlo Alberto Notebooks 91, Collegio Carlo Alberto.
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  17. George J. Borjas, 1980. "The Relationship between Wages and Weekly Hours of Work: The Role of Division Bias," Journal of Human Resources, University of Wisconsin Press, vol. 15(3), pages 409-423.
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Cited by:

  1. Gustavo Canavire-Bacarreza & Fernando Rios-Avila, 2015. "On the Determinants of Changes in Wage Inequality in Bolivia," Economics Working Paper Archive wp_835, Levy Economics Institute.
  2. Sumon Majumdar & Sanjay Jain & Sharun Mukand, 2012. "Walk the Line: Conflict, State Capacity and the Political Dynamics of Reform," EcoMod2012 3918, EcoMod.
  3. Sandra Rodríguez, 2014. "Wage inequality in Uruguay: Technological change impact on occupational tasks," Documentos de Trabajo (working papers) 14-15, Instituto de Economía - IECON.
  4. Louise Cord & Maria Eugenia Genoni & Carlos Rodriguez Castelan, 2015. "Shared Prosperity and Poverty Eradication in Latin America and the Caribbean," World Bank Publications, The World Bank, number 21751.

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