The Effects of the Minimum Wage on Employment and Wages

Produced by: 
Universidad de Chile
Available from: 
June 2018
Paper author(s): 
Nicolás Grau
Jorge Miranda
Esteban Puentes
Topic: 
Labor
Year: 
2018

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 allows 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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