Measuring the Impact of Minimum Wages : Evidence from Latin America

Maloney, William F. ; Nunez, Jairo ; Cunningham, Wendy ; Fiess, Norbert ; Montenegro, Claudio ; Murrugarra, Edmundo ; Santamaria, Mauricio ; Sepulveda, Claudia

World Bank, Washington, DC

关键词: CDF;    DEFORESTATION;    DISTORTIONARY EFFECTS;    EARNINGS;    ECONOMIC ACTIVITY;   

DOI  :  10.1596/1813-9450-2597
RP-ID  :  WPS2597

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

The authors provide an overview ofminimum wage levels in Latin America and their true impacton the distribution of wages, using both numerical measuresand kernal density plots for eight countries (Argentina,Bolivia, Brazil, Chile, Colombia, Honduras, Mexico, andUruguay). They especially try to identify"numeraire" effects--where the minimum is used asa reference higher in the wage distribution--and"lighthouse" effects--where it influences wagesetting in the unregulated or "informal" sector.Their main findings: First, statutory minimum wages areoften misleading, and graphical methods may be morereliable. Second, the minimum wage's effect on wagesetting extends far beyond what is usually considered andprobably beyond the effect in industrial countries. Usingpanel employment data from Colombia, where minimum wagesseem high and binding, the authors quantify the minimumwage's effects on wages and on the probability ofbecoming unemployed. The Colombian case confirms theevidence offered by kernal density estimates: 1) The minimumwage can have an important impact on wage distribution inthe neighborhood of the minimum wage. 2) The effects echo upthe wage distribution in a clear demonstration of the"numeraire" effect. That this effect is strongerin Latin America than in the United States suggests that theminimum wage induces further-reaching rigidities in thelabor market. The trade-off between any possible effect onpoverty and reduced flexibility is likely to be more severein countries where this is the case. The effects onemployment, and unemployment, are substantial. 3) Informalsalaries wages are also affected, confirming the graphicalevidence of strong lighthouse effects. Self-employmentearnings are not, however, confirming that the minimum wageis not simply serving as a measure of inflationary expectations.