Earnings Inequality and the Minimum Wage: Evidence from Brazil

Niklas Engbom and Christian Moser

No 6393, CESifo Working Paper Series from CESifo

Abstract: We quantify the effect of a minimum wage on compression throughout the earnings distribution. Using the case of Brazil, which experienced a large decrease in earnings inequality while its real minimum wage increased from 1996-2012, we document that the inequality decrease was bottom-driven yet widespread, with compression up to the 75th earnings percentile. We develop an equilibrium search model with heterogeneous firms and workers and find that effects of the minimum wage are consistent with the above facts, explaining 70 percent of the observed inequality decrease, with half of the decrease due to spillovers further up the earnings distribution.

Keywords: worker and firm heterogeneity; minimum wage; matched employer-employee data; equilibrium search model (search for similar items in EconPapers)
JEL-codes: E24 E61 J31 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-dge and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (32)

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Related works:
Journal Article: Earnings Inequality and the Minimum Wage: Evidence from Brazil (2022)
Working Paper: Earnings Inequality and the Minimum Wage: Evidence from Brazil (2021)
Working Paper: Earnings Inequality and the Minimum Wage: Evidence from Brazil (2021)
Working Paper: Earnings Inequality and the Minimum Wage: Evidence from Brazil (2018)
Working Paper: Earnings Inequality and the Minimum Wage: Evidence from Brazil (2018)
Working Paper: Earnings Inequality and the Minimum Wage: Evidence from Brazil (2017)
Working Paper: Earnings Inequality and the Minimum Wage: Evidence from Brazil (2016)
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