NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Measuring the Impact of Minimum Wages: Evidence from Latin America

William F. Maloney, Jairo Nunez Mendez

NBER Working Paper No. 9800
Issued in June 2003
NBER Program(s):   LS

This paper first provides an overview of the levels of minimum wages in Latin America and their true impact on the distribution of wages using both numerical measures and kernel density plots. It identifies numeraire' effects higher in the wage distribution and lighthouse' or reference effects in the unregulated or informal' sector. The final section then employs panel employment data from Colombia, a country where minimum wages seem high and very binding, to quantify the effects of an increase on wages and employment. The evidence suggests that in the Latin American context, the minimum wage has impacts beyond those usually contemplated in the advanced country literature.

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Document Object Identifier (DOI): 10.3386/w9800

Published: Measuring the Impact of Minimum Wages. Evidence from Latin America, William Maloney, Jairo Mendez. in Law and Employment: Lessons from Latin America and the Caribbean, Heckman and Pag├ęs. 2004

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