Evidence of the Impacts of Minimum Wages on Labor Market Outcomes: The Case of Bolivia

53 Pages Posted: 3 May 2018 Last revised: 13 Jul 2018

See all articles by Marcelo Claure

Marcelo Claure

Independent

Alejandra Leyton

Independent

Christian Valencia

University of San Andres (UMSA)

Vanessa Sánchez

Independent

Jorge Dávalos

Universidad del Pacifico

Date Written: February 1, 2017

Abstract

Economic theory suggests that minimum wages may lead to unemployment; nevertheless, empirical evidence in developed economies stays ambiguous. Evidence from developing countries is even more heterogenous due to the low law enforcement and weaker labor market institutions. Thus, our aim is to assess the impact of minimum wage increases on labor market outcomes in Bolivia, a country characterized by weak law compliance and high informality. Our identification strategy exploits differences in exposure to minimum wage increases across subsets of population for the period 2006-2013. Our results show positive and significant effects over real wages for men with no effects on employment, informalization or hours worked. Furthermore, we find evidence of gender discrimination since women are prone to suffer unemployment and informalization while not benefiting from higher real wages as men do.

Keywords: minimum wage, unemployment, informal employment

Suggested Citation

Claure, Marcelo and Leyton, Alejandra and Valencia, Christian and Sánchez, Vanessa and Dávalos, Jorge, Evidence of the Impacts of Minimum Wages on Labor Market Outcomes: The Case of Bolivia (February 1, 2017). Partnership for Economic Policy Working Paper No. 2017-10, Available at SSRN: https://ssrn.com/abstract=3163670 or http://dx.doi.org/10.2139/ssrn.3163670

Marcelo Claure

Independent ( email )

Alejandra Leyton

Independent ( email )

Christian Valencia (Contact Author)

University of San Andres (UMSA) ( email )

Vita Dumas 284
(1644) Victoria, Pcia
Buenos Aires, Buenos Aires 1644
Argentina

Vanessa Sánchez

Independent ( email )

Jorge Dávalos

Universidad del Pacifico ( email )

Av. Salaverry 2020
Región Metropolitana
Lima 18, Santiago Lima 11
Peru

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