abstract: 'Even though there is growing social support for higher minimum wages as

  anti-poverty policy tools, very little is known about their

  effectiveness in reducing poverty or inequality in the developing world.

  Latin America''s largest economy offers a fertile setting for shedding

  light on the issue, in being a large and data-rich country where

  frequent increases in the minimum wage can allow for direct estimation

  of influence on the distribution of income. Using a

  difference-in-difference estimator that takes advantage of substantial

  regional income variation and 21 increases in the Brazilian national

  wage floor, the study finds that within three months of these minimum

  wage hikes, poverty and inequality declined by 2.8\% and 2.4\%,

  respectively. Influence waned over time, particularly with respect to

  bottom-sensitive distribution measures, a development that is consistent

  with resulting job loses that fell more heavily among poorer households.

  The fact that the following annual hike in the minimum wage led to a

  renewed decline in poverty and inequality, suggests that potential

  unemployment costs were again overwhelmed by benefits in the form of

  higher wages among working individuals. However, evidence also

  establishes an inelastic relationship between wage floor hikes and

  changes in the incidence of poverty, as well as diminishing returns to

  the strategy when the legal minimum is high relative to median earnings.

  (C) 2020 Elsevier Ltd. All rights reserved.'
affiliation: 'Sotomayor, OJ (Corresponding Author), Univ Puerto Rico, Dept Econ, Mayaguez,
  PR 00681 USA.

  Sotomayor, Orlando J., Univ Puerto Rico, Dept Econ, Mayaguez, PR 00681 USA.'
article-number: '105182'
author: Sotomayor, Orlando J.
author-email: orlando.sotomayor@upr.edu
author_list:
- family: Sotomayor
  given: Orlando J.
da: '2023-09-28'
doi: 10.1016/j.worlddev.2020.105182
files: []
issn: 0305-750X
journal: WORLD DEVELOPMENT
keywords: Minimum wage; Poverty; Inequality; Brazil; Developing areas
keywords-plus: FAMILY INCOMES; EMPLOYMENT; POOR; CALIFORNIA; INCREASES; IMPACT
language: English
month: FEB
number-of-cited-references: '68'
orcid-numbers: Sotomayor, Orlando/0000-0001-8595-9330
papis_id: e43eeec29d99128e0ebebf85621932e8
ref: Sotomayor2021canminimum
times-cited: '11'
title: Can the minimum wage reduce poverty and inequality in the developing world?
  Evidence from Brazil
type: Article
unique-id: WOS:000601162800036
usage-count-last-180-days: '7'
usage-count-since-2013: '48'
volume: '138'
web-of-science-categories: Development Studies; Economics
year: '2021'