IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp1135.html
   My bibliography  Save this paper

The Effects of the Minimum Wage on Wages, Employment and Prices

Author

Listed:
  • Lemos, Sara

    (University of Leicester)

Abstract

This paper puts together evidence for the wages, employment and price effects of the minimum wage. This overall picture will help to understand the small employment effects prevalent in the literature in the light of price effects. The data used is an under-explored monthly Brazilian household survey from 1982 to 2000, similar to the US CPS. As the international literature on the minimum wage is scanty on non-US empirical evidence, in particular on developing countries, this paper will also help to extend the current understanding on the effects of the minimum wage in developing countries. This is crucial if the minimum wage is to be used as a policy to help poor people in poor countries.

Suggested Citation

  • Lemos, Sara, 2004. "The Effects of the Minimum Wage on Wages, Employment and Prices," IZA Discussion Papers 1135, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp1135
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp1135.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lemos Sara, 2005. "Political Variables as Instruments for the Minimum Wage," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-31, December.
    2. Pablo Fajnzylber, 2001. "Minimum Wage Effects Throughout the Wage Distribution: Evidence from Brazil's Formal and Informal Sectors," Anais do XXIX Encontro Nacional de Economia [Proceedings of the 29th Brazilian Economics Meeting] 098, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    3. Brown, Charles, 1999. "Minimum wages, employment, and the distribution of income," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 32, pages 2101-2163, Elsevier.
    4. Pablo Fajnzylber, 2001. "Minimum wage effects throughout the wage distribution: evidence from Brazil’s formal and informal sectors," Textos para Discussão Cedeplar-UFMG td151, Cedeplar, Universidade Federal de Minas Gerais.
    5. Dickens, Richard & Machin, Stephen & Manning, Alan, 1999. "The Effects of Minimum Wages on Employment: Theory and Evidence from Britain," Journal of Labor Economics, University of Chicago Press, vol. 17(1), pages 1-22, January.
    6. Sara lemos, 2004. "The Effects of the Minimum Wage in the Private and Public Sectors in Brazil," Discussion Papers in Economics 04/12, Division of Economics, School of Business, University of Leicester.
    7. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lemos Sara, 2005. "Political Variables as Instruments for the Minimum Wage," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-31, December.
    2. Obeng, Samuel Kwabena, 2015. "An empirical analysis of the relationship between minimum wage, investment and economic growth in Ghana," MPRA Paper 65674, University Library of Munich, Germany.
    3. Belser, Patrick. & Rani, Uma., 2010. "Extending the coverage of minimum wages in India : simulations from household data," ILO Working Papers 994584553402676, International Labour Organization.
    4. Sara Lemos, 2004. "The Effects of the Minimum Wage on Prices in Brazil," Labor and Demography 0403011, University Library of Munich, Germany.
    5. Acevedo Rueda, Rafael Alexis & Sanchez, Yasmin, 2013. "El consumo, ingreso y ahorro del Venezolano: un primer análisis descriptivo de la V República [Venezuelan's consumption, incomes and savning: a first descriptive analysis of the V Republic]," MPRA Paper 58211, University Library of Munich, Germany, revised 2014.
    6. Sara Lemos, 2004. "A Menu of Minimum Wage Variables for Evaluating Wages and Employment Effects: Evidence from Brazil," Discussion Papers in Economics 04/3, Division of Economics, School of Business, University of Leicester.
    7. 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).
    8. Gabriel Ulyssea & Miguel N. Foguel, 2006. "Efeitos do Salário Mínimo Sobre o Mercado de Trabalho Brasileiro," Discussion Papers 1168, Instituto de Pesquisa Econômica Aplicada - IPEA.
    9. Lemos, Sara, 2009. "Minimum wage effects in a developing country," Labour Economics, Elsevier, vol. 16(2), pages 224-237, April.
    10. Fitriya & Abdul Basyith & Rabin Ibnu Zainal, 2020. "The Doubled-Edge Sword of Raising the Minimum Wage: The Case of Indonesia," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 10(12), pages 1453-1465, December.
    11. Pablo Blanchard & Paula Carrasco & Rodrigo Ceni & Cecilia Parada & Sofía Santín, 2021. "Distributive and displacement effects of a coordinated wage bargaining scheme," Documentos de Trabajo (working papers) 21-26, Instituto de Economía - IECON.
    12. Tan Boon Seng & Stephen Ko, 2010. "The Minimum Wage Policy in Hong Kong," Asia Pacific Journal of Public Administration, Taylor & Francis Journals, vol. 32(2), pages 163-176, December.
    13. Beteta, Hugo E. & Bielschowsky, Ricardo & del Castillo, Miguel & Orozco, Roberto & Squeff, Gabriel Coelho, 2022. "A strategy for development with income redistribution: the minimum wage and growth fronts in Mexico," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    14. Obeng, Samuel Kwabena, 2015. "An Empirical Analysis of the Relationship between Minimum Wage, Investment and Economic Growth in Ghana," African Journal of Economic Review, African Journal of Economic Review, vol. 3(2), July.
    15. Hoxha Adriatik, 2010. "Causal relationship between prices and wages: VECM analysis for Germany," EuroEconomica, Danubius University of Galati, issue 26, pages 90-106, November.
    16. Cosmin ENACHE, 2012. "Unemployment Benefit, Minimum Wage And Average Salary Earnings In Romania," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 10, pages 85-96, December.
    17. M. A. Ivanova, 2016. "Analysis of the nature of cause-and-effect relationship between inflation and wage in Russia," Studies on Russian Economic Development, Springer, vol. 27(5), pages 575-584, September.
    18. Gligor Bishev & Tatjana Boshkov, 2015. "Arguments for and Against Retaining Exchange Rate Regime: An Empirical Analysis for Republic of Macedonia," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(8), pages 1004-1013, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sara lemos, 2004. "The Effects of the Minimum Wage in the Formal and Informal Sectors in Brazil," Discussion Papers in Economics 04/8, Division of Economics, School of Business, University of Leicester.
    2. Lemos, Sara, 2009. "Minimum wage effects in a developing country," Labour Economics, Elsevier, vol. 16(2), pages 224-237, April.
    3. Sara Lemos, 2004. "Are Wage and Employment Effects Robust to Alternative Minimum Wage Variables?," Discussion Papers in Economics 04/4, Division of Economics, School of Business, University of Leicester.
    4. Lemos Sara, 2005. "Political Variables as Instruments for the Minimum Wage," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-31, December.
    5. Sara Lemos, 2007. "Minimum wage effects across the private and public sectors in Brazil," Journal of Development Studies, Taylor & Francis Journals, vol. 43(4), pages 700-720.
    6. Gindling, T.H. & Terrell, Katherine, 2007. "The effects of multiple minimum wages throughout the labor market: The case of Costa Rica," Labour Economics, Elsevier, vol. 14(3), pages 485-511, June.
    7. Gindling, T. H. & Terrell, Katherine, 2004. "The Effects of Multiple Minimum Wages Throughout the Labor Market," IZA Discussion Papers 1159, Institute of Labor Economics (IZA).
    8. David Neumark & William Wascher, 2006. "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research," NBER Working Papers 12663, National Bureau of Economic Research, Inc.
    9. Gindling, T.H. & Terrell, Katherine, 2009. "Minimum wages, wages and employment in various sectors in Honduras," Labour Economics, Elsevier, vol. 16(3), pages 291-303, June.
    10. Sara Wong, 2017. "Minimum wage impacts on wages and hours worked of low-income workers in Ecuador," Working Papers PMMA 2017-14, PEP-PMMA.
    11. Carla Canelas, 2014. "Minimum Wage and Informality in Ecuador," WIDER Working Paper Series wp-2014-006, World Institute for Development Economic Research (UNU-WIDER).
    12. Malena Arcidiácono, 2015. "Salario Mínimo y Distribución salarial: Evidencia para Argentina 2003 – 2013," CEDLAS, Working Papers 0192, CEDLAS, Universidad Nacional de La Plata.
    13. Wong, Sara A., 2019. "Minimum wage impacts on wages and hours worked of low-income workers in Ecuador," World Development, Elsevier, vol. 116(C), pages 77-99.
    14. repec:unu:wpaper:wp2014-006 is not listed on IDEAS
    15. Jellal, Mohamed, 2012. "Maroc salaire minimum emploi et pauvreté [Morocco minimum wage employment and poverty]," MPRA Paper 38491, University Library of Munich, Germany.
    16. Pandelis Mitsis, 2019. "The Impact of the Minimum Wage on Wages and Work in Cyprus," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 13(2), pages 72-101, December.
    17. Sara Lemos, 2004. "A Menu of Minimum Wage Variables for Evaluating Wages and Employment Effects: Evidence from Brazil," Discussion Papers in Economics 04/3, Division of Economics, School of Business, University of Leicester.
    18. Gindling, T.H. & Terrell, Katherine, 2010. "Minimum Wages, Globalization, and Poverty in Honduras," World Development, Elsevier, vol. 38(6), pages 908-918, June.
    19. Fernando Alberto Groisman & Albano Blas Vergara & Analía Calero & Julia Liniado & María Eugenia Sconfienza & Maria Soledad Cubas & Santiago Boffi, 2015. "Social Protection to the Informal Sector: The Role of Minimum Wage and Income Transfer Policies," Working Papers PMMA 2015-10, PEP-PMMA.
    20. Alexandros Karakitsios & Manos Matsaganis, 2018. "Minimum Wage Effects on Poverty and Inequality," DEOS Working Papers 1801, Athens University of Economics and Business.
    21. 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).

    More about this item

    Keywords

    cost shock; price effect; employment effect; wage effect; minimum wage; pass-through; Brazil;
    All these keywords.

    JEL classification:

    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp1135. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.