Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/289883 
Year of Publication: 
2022
Series/Report no.: 
Documento de Trabajo No. 302
Publisher: 
Universidad Nacional de La Plata, Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS), La Plata
Abstract: 
Minimum wage (MW) policies are widespread in the developing world and yet their effects are still unclear. In this paper we explore the effect of national MW policies in Latin America's six largest economies by exploiting the heterogeneity in the bite of the national minimum wage across local labor markets and over time. We find evidence that the MW has a compression effect on the wage distribution of formal workers. The effect was particularly large during the 2000s, a decade of sustained growth and strong labor markets. In contrast, the effect seems to vanish in the 2010s, a decade of much weaker labor markets. We also find suggestive evidence of a lighthouse effect: the MW seems to have an equalizing effect also on the wage distribution of informal workers.
Subjects: 
Minimum Wage
Wages
Labor Markets
Inequality
Informality
Latin America
JEL: 
J22
J31
J38
K31
Document Type: 
Working Paper

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