Earnings Inequality and the Minimum Wage: Evidence from Brazil

This paper analyzes the contribution of the minimum wage to the well documented rise in earnings inequality in Mexico between the late 1980s and the early 2000s. We find that a substantial part of the growth in inequality, and essentially all of the growth in inequality in the bottom end of the distribution, is due to the steep decline in the real value of the minimum wage. (JEL J31, J38, O15, O17, O18, R23)

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The minimum wage and annual earnings inequality

Economics Letters ◽

10.1016/j.econlet.2021.110001 ◽

2021 ◽

pp. 110001

Author(s):

Gary V. Engelhardt ◽

Patrick J. Purcell

Keyword(s):

Minimum Wage ◽

Earnings Inequality ◽

Annual Earnings

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The Contribution of the Minimum Wage to US Wage Inequality over Three Decades: A Reassessment

American Economic Journal Applied Economics ◽

10.1257/app.20140073 ◽

2016 ◽

Vol 8 (1) ◽

pp. 58-99 ◽

Cited By ~ 81

Author(s):

David H. Autor ◽

Alan Manning ◽

Christopher L. Smith

Keyword(s):

Minimum Wage ◽

Wage Inequality ◽

Wage Structure ◽

Earnings Inequality ◽

Minimum Wages ◽

Wage Distribution ◽

Prior Work ◽

Lower Tail ◽

Structure Changes ◽

Wage Effects

We reassess the effect of minimum wages on US earnings inequality using additional decades of data and an IV strategy that addresses potential biases in prior work. We find that the minimum wage reduces inequality in the lower tail of the wage distribution, though by substantially less than previous estimates, suggesting that rising lower tail inequality after 1980 primarily reflects underlying wage structure changes rather than an unmasking of latent inequality. These wage effects extend to percentiles where the minimum is nominally nonbinding, implying spillovers. We are unable to reject that these spillovers are due to reporting artifacts, however. (JEL J22, J31, J38, K31)

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