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How Do Minimum Wage Policies Affect Workers in Emerging Markets?

Author

Listed:
  • Albert Park

    (Department of Economics, Hong Kong University of Science and Technology
    Division of Social Science, Hong Kong University of Science and Technology
    Institute for Emerging Market Studies, Hong Kong University of Science and Technology)

Abstract

Prof. Albert Park, Director of HKUST IEMS, Chair Professor at HKUST's Division of Social Science, and Professor at HKUST's Department of Economics, reviews the efficacy of minimum wage policies across BRICS countries, i.e. Brazil, Russia, India, China, and South Africa, highlighting their success or lackthereof as related to critical factors such as labor market coverage, policy enforcement, minimum wage level as compared to mean wages, and others. Prof. Park notes that while minimum wage policies in BRICS countries generally increase wages at the bottom end of the wage distribution, their impact on employment and wealth inequality is less defined. The impact of such minimum wage policies closely tied to the levels of policy compliance and enforcement in each country. For example, in China, India, and South Africa, where enforcement is relatively high, minimum wages have had marked positive effects on labor markets, serving as a sort of "lighthouse effect"), while in Russia and Brazil such regulations may have increased employment in informal labor markets.

Suggested Citation

  • Albert Park, 2015. "How Do Minimum Wage Policies Affect Workers in Emerging Markets?," HKUST IEMS Thought Leadership Brief Series 2015-07, HKUST Institute for Emerging Market Studies, revised Apr 2015.
    • Handle: RePEc:hku:briefs:201507
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    File URL: https://iems.ust.hk/assets/publications/thought-leadership-briefs/2015/tlb07/1503094_ust_iems_thought_leadership_brief_issue7_v05-web.pdf
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    More about this item

    Keywords

    minimum wage policy; emerging markets; China; Russia; South Africa; Brazil; India; BRICS; minimum wage enforcement; minimum wage compliance;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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