Minimum Wage: Empirical evidence for Uruguay

Fernando Borraz and Nicolás González-Pampillón ()

No 2009003, Documentos de trabajo from Banco Central del Uruguay

Abstract: Since the end of the nineties, as most of Latin American countries, Uruguay has observed a trend toward wage inequality. In order to explain the increasing inequality prior research focused on several issues such as trade openness, technological change and labor policies. In this research we focus on minimum wage and its effects on wage structure, applying the DiNardo, Fortín and Lemieux semi-parametric approach which implies counterfactual exercises assuming zero employment effect. For the period 1986-2003, where minimum wage decreases by 66% in real terms (3.7% the yearly average), we find that it contributes slightly to wage inequality only for males. For the period 2004-2009, where minimum wage increases by 153% (25.4% the yearly average), we find that it contributes to decrease wage inequality for females. These results enable us to conclude: i) it is not clear that the erosion of minimum wage during the nineties is responsible for the increase in wage inequality; and ii) the re-introduction of minimum wage helps to decrease only female wage inequality. Nothing can be said about efficiency of this policy and further research is required on the issue of employment effect.

Keywords: Minimum wage; labor demand; Uruguay (search for similar items in EconPapers)
JEL-codes: J23 J38 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.bcu.gub.uy/Estadisticas-e-Indicadores/ ... 20Trabajo/3.2009.pdf First version, 2009 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bku:doctra:2009003

Access Statistics for this paper

More papers in Documentos de trabajo from Banco Central del Uruguay Biblioteca Especializada. Banco Central del Uruguay. Diagonal Fabini 777, Montevideo-Uruguay. CP 11100. Contact information at EDIRC.
Bibliographic data for series maintained by Biblioteca Especializada ().