The Impact of the Minimum Wage on the Labor Market, Poverty and Fiscal Budget in Brazil

Foguel, Miguel Nathan; Ramos, Lauro Roberto Albrecht; Carneiro, Francisco

doi:10.2139/ssrn.290623

Cited by 24 publications

(17 citation statements)

References 23 publications

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“…That is because the public sector is overpopulated by minimum wage workers (7% of them) and because benefits and pensions are linked to the minimum wage. As a result, the fiscal impact of minimum wage increases has often been the key political criterion for determining the size of the increase in Brazil (Foguel et al, 2001). Politicians favoring more generous increases are those who represent organized workers or retirees and beneficiaries, whereas politicians against more generous increases are those supporting the government coalition that are concerned with the impact of the increase on the public deficit.…”

Section: Voting Datamentioning

confidence: 99%

Political Variables as Instruments for the Minimum Wage

Lemos¹

2005

Contributions in Economic Analysis &Amp; Policy

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A number of recent empirical studies have found no evidence that the minimum wage adversely affects employment. Explanations for such non-negative estimates include new theoretical approaches, empirical identification and data issues. In this paper we examine the robustness of such estimates to concerns about bias arising from the simultaneous determination of employment and the minimum wage. We use a number of novel political variables as instruments to control for this source of endogeneity. We exploit the personal characteristics of the politicians voting on minimum wage bills, their voting behavior and their electoral process. Our main conclusion is that the weak relationship between minimum wages and employment does not appear to be driven by endogeneity.

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Section: Voting Datamentioning

confidence: 99%

Political Variables as Instruments for the Minimum Wage

Lemos¹

2005

Contributions in Economic Analysis &Amp; Policy

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“…The evidence garnered from numerous studies points to very small disemployment effects among workers who have a signed labor card, considered to be formal/covered sector workers. For example, using the data from the Monthly Employment Survey (PME) for the 1980s and 1990s, Lemos (2006) finds statistically insignificant effects and Fogel et al (2001) find elasticities of employment with respect to the MW, ranging from − 0.001 to −0.024. Montenegro and Pagés (2004), using data from Santiago, Chile over 1960-1998 and two levels of the MWs (for adult v. youth), conclude that a 1% increase in MWs reduces the probability of employment of male workers by 0.017 percentage points but it raises the employment rates of women by 0.046 percentage points.…”

Section: Introductionmentioning

confidence: 99%

Minimum wages, wages and employment in various sectors in Honduras

Gindling

Terrell

2009

Labour Economics

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“…These findings suggest that the interactions between the formal and informal sectors in response to changes in the minimum wage may be more complex in practice than in theory. Based on employment-survey data, Lemos (2006) finds no evidence of an adverse employment effect associated with the minimum wage in the formal and informal sectors, while Foguel, Ramos and Carneiro (2001) report a negative effect in the formal sector and a positive effect in the informal sector on the basis of time-series data.…”

Section: Developing Countriesmentioning

confidence: 97%

How Does Decentralised Minimum-Wage Setting Affect Unemployment and Informality?

Comola

Mello

2009

OECD Economics Department Working Papers

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JT03267795The case of IndonesiaThe Indonesian labour market is characterised by widespread informality. To some extent, these outcomes can be attributed to a sharp increase in the real value of the minimum wage since 2001, when minimum-wage setting was decentralised to the provincial governments. To test this hypothesis, this paper uses survey data on the labour market (Sakernas), household income and expenditure (Susenas) and the industrial sector (Survei Industri) to construct a district-level dataset spanning the period 1996 to 2004. The effects of changes in the minimum wage on unemployment, formal-sector employment and the incidence of informality in urban areas are estimated separately by fixed effects and jointly by a seemingly unrelated regression (SUR) estimator. Our findings show that an increase in the minimum-to-mean wage ratio is associated with a net increase in employment: a rise in informal-sector employment more than compensates for job losses in the formal sector. This Working Paper relates to the 2008 OECD Economic Assessment of Indonesia (www.oecd.org/eco/surveys/indonesia).JEL codes: J23; J31; J64

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The Impact of the Minimum Wage on the Labor Market, Poverty and Fiscal Budget in Brazil

Cited by 24 publications

References 23 publications

Political Variables as Instruments for the Minimum Wage

Political Variables as Instruments for the Minimum Wage

Minimum wages, wages and employment in various sectors in Honduras

How Does Decentralised Minimum-Wage Setting Affect Unemployment and Informality?

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