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Comparing employment estimates using different minimum wage variables: the case of Brazil

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  • Sara Lemos

Abstract

Several minimum wage variables have been suggested in the literature to estimate the effect of the minimum wage on employment. The most common ones are the real minimum wage, the 'Kaitz index', the 'fraction affected', the 'fraction at' and the 'fraction below'. This diversity of variables makes it difficult to compare the associated estimates across studies. One problem is that these estimates are not always calibrated to represent the employment effect of a 1% minimum wage increase. Another problem is that these estimates measure employment effects for different groups of workers. In this paper we critically compare employment effect estimates using these five minimum wage variables and data from a Brazilian monthly household survey panel from 1982 to 2000. Our principal finding is that the sign of this effect is robust across the different minimum wage variables, but that its magnitude and significance are sensitive to the minimum wage variable used.

Suggested Citation

  • Sara Lemos, 2009. "Comparing employment estimates using different minimum wage variables: the case of Brazil," International Review of Applied Economics, Taylor & Francis Journals, vol. 23(4), pages 405-425.
    • Handle: RePEc:taf:irapec:v:23:y:2009:i:4:p:405-425
    DOI: 10.1080/02692170902954759
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    References listed on IDEAS

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    Cited by:

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    2. Neumark, David & Munguía Corella, Luis Felipe, 2021. "Do minimum wages reduce employment in developing countries? A survey and exploration of conflicting evidence," World Development, Elsevier, vol. 137(C).
    3. Jose Caraballo†Cueto, 2016. "Is there a minimum wage biting in Puerto Rico? Updating the debate," Industrial Relations Journal, Wiley Blackwell, vol. 47(5-6), pages 513-529, November.

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