Skip to main content
Article thumbnail
Location of Repository

The Effects of the Minimum Wage in the Private and Public Sectors in Brazil

By Sara Lemos


The wage and employment effects of the minimum wage predicted by the standard neoclassical theory rely on\ud a profit maximizing firm, not on a Government employer that can cover the higher wage bill by raising taxes,\ud reducing expenditure, or simply printing money. If the public sector has an inelastic labour demand, the\ud associated non-negative employment effect might offset some of the negative employment effect observed in\ud the private sector and the overall employment effect might be less adverse. This is particularly so if the public\ud sector is overpopulated by minimum wage workers, as in Brazil. There is very limited evidence on the\ud minimum wage effects in developing countries, and none whatsoever on the minimum wage effects across the\ud private and public sectors. This paper estimates the effects of the minimum wage on wages and employment\ud in both the private and public sectors. The data used is an under-explored monthly Brazilian household\ud survey from 1982 to 2000 at individual and regional levels. Robust results suggest that the minimum wage\ud compresses the distribution of both sectors, but in line with a stronger effect in the private sector, more\ud adverse employment effects in the long run are also observed in that sector. In the public sector, no evidence\ud of adverse employment effects was uncovered

Topics: minimum wage, wage effect, employment effect, private sector, public sector, Brazil
Publisher: Dept. of Economics, University of Leicester
Year: 2004
OAI identifier:

Suggested articles


  1. (2004). Are Wage and Employment Effects Robust to Alternative Minimum Wage Variables?”, doi
  2. (1992). Do Minimum Wages Reduce Employment? A Case Study of California, 1987-89," doi
  3. (1982). Economic Determinants of Geographic and Individual Variation in the Labor Market Position of Young Persons,"
  4. (1978). Effects of Minimum Wages on the Level and Age Composition of Youth Employment," doi
  5. (1992). Employment Effects of Minimum and Subminimum Wages: Panel Data on State Minimum Wage Laws," doi
  6. (2002). Employment Effects of the Minimum Wage Can Affect Wage Inequality: The Case of Colombia," doi
  7. (1970). Experience of the Past: The National Minimum, Youth Unemployment and Minimum Wages,"
  8. (1981). Legal Minimum Wages as an Instrument of Social Policy in Less Developed Countries, with Special Reference to Costa Rica,"
  9. (2003). Minimum Wages in Latin America," doi
  10. (1999). Minimum Wages, Employment, and the Distribution of Income," doi
  11. (1995). Myth and Measurement: The New Economics of the Minimum Wage. doi
  12. (2003). Political Variables as Instruments for the Minimum Wage”, UCL Working Paper, doi
  13. (1993). Regional Effects of the Minimum Wage on Teenage Employment," doi
  14. (2002). Salario Minimo E Bem Estar Social No Brasil: Uma Resenha Da Literatura,"
  15. (1991). Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," doi
  16. (2003). The Distributional Effects of Minimum Wages in Brazil: 1996-2001," Unpublished Paper.
  17. (1996). The Economic Impact of Minimum Wages in Europe," Economic Policy: doi
  18. (2000). The Effect of the Minimum Wage on Employment and Hours," doi
  19. (1999). The Effects of Minimum Wages on Employment: Theory and Evidence from Britain," doi
  20. (1996). The Effects of Minimum Wages on Teenage Employment and Enrollment: Evidence from Matched Cps Surveys," doi
  21. (2002). The Effects of Minimum Wages on the Formal and Informal Sector: Evidence from Costa Rica," Unpublished Paper.
  22. (1999). The Highs and Lows of the Minimum Wage Effect: A Time-Series Cross-Section Study of the Canadian Law," doi
  23. (1997). The Impact of Minimum Wages in Mexico and Colombia," doi
  24. (2002). Uma Resenha Empirica Sobre Os Efeitos Do Salario Minimo No Mercado De Trabalho Brasileiro," doi
  25. (2003). Un Diagnóstico Del Desempleo En Chile," Washington: Inter-American Development.
  26. (1995). What a Wonderful World This Would Be,"
  27. (1992). When the Minimum Wage Really Bites: The Effect of the U.S.-Level Minimum on Puerto Rico," doi
  28. (2003). Where the Minimum Wage Bites Hard: Introduction of Minimum Wages to a Low Wage Sector," doi
  29. (2004). Who Benefits from Labor Market Regulations? Chile 1960-1998," doi

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.