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Full-Text Articles in Social and Behavioral Sciences
Labor Market Policies In A Roy-Rosen Bargaining Economy, Hugo Jales, Zhengfei Yu
Labor Market Policies In A Roy-Rosen Bargaining Economy, Hugo Jales, Zhengfei Yu
Center for Policy Research
We study the effects of labor market policies using a bargaining model featuring compensating differentials (Rosen, 1986) and self-selection (Roy, 1951). The framework allows us to create a taxonomy of formal and informal employment. We use the model to estimate the effects of the minimum wage for the Brazilian economy using the “PNAD" dataset for the years 2001-2005. Our results suggest that, although the minimum wage generates unemployment and reallocation of labor to the informal sector, the policy might be desirable if the employment losses are concentrated in jobs characterized by low surplus.
Estimating The Effects Of The Minimum Wage In A Developing Country: A Density Discontinuity Design Approach, Hugo Jales
Estimating The Effects Of The Minimum Wage In A Developing Country: A Density Discontinuity Design Approach, Hugo Jales
Center for Policy Research
This paper proposes a new framework to identify the effects of the minimum wage on the joint distribution of sector and wages in a developing country. I show that under reasonable assumptions, cross-sectional data on the worker's wage and sector can identify the joint distribution of the latent counterparts of these variables; that is, the sector status and wage that would prevail in the absence of the minimum wage. I apply the method in the “PNAD”, a nationwide representative Brazilian cross-sectional dataset for the years 2001 to 2009. The results indicate that the size of the informal sector is increased …