The Effects of the Minimum Wage on Employment and Wages
Nicolas Grau (),
Jorge Miranda and
Esteban Puentes ()
Working Papers from University of Chile, Department of Economics
The effect of the minimum wage on labor market outcomes is controversial. There are several studies for developed countries with mixed results, but there is a lack of evidence for developing countries. We have access to a panel of workers from the unemployment insurance system in Chile, which allow us to study the effect of four consecutive increases in minimum wages using administrative data. We use several definitions of treatment and control groups, finding consistently a small and positive effect of the minimum wage on formal wages, and non-significant effects on formal employment.
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