The Minimum Wage Puzzle in Less Developed Countries: Reconciling Theory and Evidence
Christopher S Adam and
Edward F Buffie
No 2020/023, IMF Working Papers from International Monetary Fund
We show that a dynamic general equilibrium model with efficiency wages and endogenous capital accumulation in both the formal and (non-agricultural) informal sectors can explain the full range of confounding stylized facts associated with minimum wage laws in less developed countries.
Keywords: Employment; Wages; Real wages; Informal employment; Labor; WP,math display (search for similar items in EconPapers)
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