Minimum Wages and Poverty in Developing Countries: Some Empirical Evidence
Nora Lustig () and
Darryl McLeod ()
Working Papers from Brookings Institution - Working Papers
This paper examines the relationship between minimum wages and poverty in developing countries. We regress changes in poverty indicators for a group of developing countries on minimum wage changes, changes in public spending, human capital investment and other variables associated with changes in poverty. We find that higher minimum wages are associated with lower levels of poverty. This result is replicated across a range of poverty measures and country groupings. Higher minimum wages are also associated with higher unemployment, so the potential reduction in poverty is not costless from an efficiency point of view.
Keywords: MINIMUM WAGE; POVERTY; DEVELOPING COUNTRIES (search for similar items in EconPapers)
JEL-codes: I30 I32 J32 O10 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:fth:brooki:125
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