Political Variables as Instruments for the Minimum Wage

Sara Lemos

No 04/11, Discussion Papers in Economics from Division of Economics, School of Business, University of Leicester

Abstract: Following the early 1980s apparent consensus, there has been a controversial debate in the literature over the direction of the minimum wage employment effect. Explanations to non-negative effects range from theoretical to empirical identification and data issues. An explanation, however, that has not been sufficiently explored is that a non-negative effect might be an upward biased estimate of a truly negative effect, resulting from the simultaneous determination of the minimum wage and employment. This paper estimates the employment effect of the minimum wage using a number of political variables – not previously used in the literature – as excluded exogenous instruments to control for the endogeneity of the minimum wage variable. The data used is an under-explored Brazilian monthly household survey from 1982 to 2000. Robust results indicate that an increase in the minimum wage has very small adverse effects on employment.

Keywords: minimum wage; wage effect; employment effect; instruments; political variables; Brazil (search for similar items in EconPapers)
JEL-codes: J38 (search for similar items in EconPapers)
Date: 2004-04
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.le.ac.uk/economics/research/RePEc/lec/leecon/dp04-11.pdf (application/pdf)

Related works:
Journal Article: Political Variables as Instruments for the Minimum Wage (2005)
Working Paper: Political Variables as Instruments for the Minimum Wage (2004)
Working Paper: Political Variables as Instruments for the Minimum Wage (2003)
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:lec:leecon:04/11

Ordering information: This working paper can be ordered from
https://www2.le.ac.u ... -1/discussion-papers

Access Statistics for this paper

More papers in Discussion Papers in Economics from Division of Economics, School of Business, University of Leicester School of Business, University of Leicester, University Road. Leicester. LE1 7RH. UK Provider-Homepage: https://le.ac.uk/school-of-business. Contact information at EDIRC.
Bibliographic data for series maintained by Abbie Sleath ().