Does the Minimum Wage Affect Wage Inequality? A Study for the Six Largest Latin American Economies

Datos Bibliográficos

ID20301429
AutoresCarlo Lombardo (0009-0004-2433-8230, Universidad Nacional de La Plata), Lucía Ramírez Leira (0000-0001-9747-5106, Universidad Nacional de La Plata, autor de correspondencia), Leonardo Gasparini (0000-0002-2264-8399, Universidad Nacional de La Plata)
Año2024
Volumen60
Número4
Páginas494-510
Fecha de publicación2024-04-02
Peer ReviewedSí
Open AccessNo
TipoARTICLE
RevistaThe Journal of Development Studies (JOURNAL)
Identificadores de la revistaISSN: 0022-0388 • E-ISSN: 1743-9140
EditorialInforma UK Limited (PUBLISHER • GB)
DOI10.1080/00220388.2024.2312833
OpenAlexW4392292278
IdiomaEN
Citas recibidas4
Referencias citadas27

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

Affect (linguistics) · Economics · Efficiency wage · Inequality · Labour economics · Latin Americans · Minimum wage · Political science · Sociology · Wage · Wage Inequality · Employment and Welfare Studies · Labor market dynamics and wage inequality · Taxation and Compliance Studies