2023-09-28 14:46:10 +00:00
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abstract: 'Even though there is growing social support for higher minimum wages as
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anti-poverty policy tools, very little is known about their
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effectiveness in reducing poverty or inequality in the developing world.
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Latin America''s largest economy offers a fertile setting for shedding
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light on the issue, in being a large and data-rich country where
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frequent increases in the minimum wage can allow for direct estimation
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of influence on the distribution of income. Using a
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difference-in-difference estimator that takes advantage of substantial
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regional income variation and 21 increases in the Brazilian national
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wage floor, the study finds that within three months of these minimum
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wage hikes, poverty and inequality declined by 2.8\% and 2.4\%,
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respectively. Influence waned over time, particularly with respect to
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bottom-sensitive distribution measures, a development that is consistent
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with resulting job loses that fell more heavily among poorer households.
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The fact that the following annual hike in the minimum wage led to a
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renewed decline in poverty and inequality, suggests that potential
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unemployment costs were again overwhelmed by benefits in the form of
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higher wages among working individuals. However, evidence also
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establishes an inelastic relationship between wage floor hikes and
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changes in the incidence of poverty, as well as diminishing returns to
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the strategy when the legal minimum is high relative to median earnings.
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(C) 2020 Elsevier Ltd. All rights reserved.'
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affiliation: 'Sotomayor, OJ (Corresponding Author), Univ Puerto Rico, Dept Econ, Mayaguez,
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PR 00681 USA.
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Sotomayor, Orlando J., Univ Puerto Rico, Dept Econ, Mayaguez, PR 00681 USA.'
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article-number: '105182'
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author: Sotomayor, Orlando J.
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author-email: orlando.sotomayor@upr.edu
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author_list:
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- family: Sotomayor
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given: Orlando J.
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da: '2023-09-28'
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doi: 10.1016/j.worlddev.2020.105182
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files: []
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issn: 0305-750X
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journal: WORLD DEVELOPMENT
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keywords: Minimum wage; Poverty; Inequality; Brazil; Developing areas
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keywords-plus: FAMILY INCOMES; EMPLOYMENT; POOR; CALIFORNIA; INCREASES; IMPACT
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language: English
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month: FEB
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number-of-cited-references: '68'
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orcid-numbers: Sotomayor, Orlando/0000-0001-8595-9330
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papis_id: e43eeec29d99128e0ebebf85621932e8
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ref: Sotomayor2021canminimum
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times-cited: '11'
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title: Can the minimum wage reduce poverty and inequality in the developing world?
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Evidence from Brazil
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2023-10-01 08:15:07 +00:00
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type: article
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2023-09-28 14:46:10 +00:00
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unique-id: WOS:000601162800036
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usage-count-last-180-days: '7'
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usage-count-since-2013: '48'
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volume: '138'
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web-of-science-categories: Development Studies; Economics
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year: '2021'
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