Kristensen, NicolaiCunningham, Wendy2012-06-182012-06-182006-03https://hdl.handle.net/10986/8337Despite the existence of minimum wage legislation in most Latin American countries, there is little empirical evidence demonstrating its impact on the distribution of wages. In this study the authors analyze cross-country data for 19 Latin American and Caribbean (LAC) countries to gain an understanding of if and how minimum wages affect wage distributions in LAC countries. Although there is no single minimum wage institution in the LAC region, the authors find regional trends. Minimum wages affect the wage distribution in both the formal and, especially, the informal sector, both at the minimum wage and at multiples of the minimum. The minimum does not uniformly benefit low-wage workers: in countries where the minimum wage is relatively low compared to mean wages, the minimum wage affects the more disadvantaged segments of the labor force, namely informal sector workers, women, young and older workers, and the low skilled, but in countries where the minimum wage is relatively high compared to the wage distribution, it primarily affects wages of the high skilled. This indicates that the minimum does not generally lift the wages of all, but instead, it offers a wage into which employers can "lock in" wages that are already near that level. Thus, minimum wage legislation is more far-reaching than originally thought, affecting both the uncovered informal sector and those earning above the minimum. In addition, the relative level of the minimum wage is important for determining whose wages are affected.CC BY 3.0 IGOADULT WORKERSAVERAGE WAGEAVERAGE WAGESBARGAINING POWERDOMESTIC WORKERSEARNINGEARNINGSEMPLOYMENTEMPLOYMENT EFFECTSFIRM SIZEFORMAL SECTOR WAGEFORMAL SECTOR WAGESHOUSEHOLD SURVEYSHUMAN CAPITALINCOMEINCOME INEQUALITYINCOMESINFORMAL SECTORINFORMAL SECTOR WORKERSJOB DURATIONJOBSLABOR FORCELABOR FORCE POPULATIONLABOR MARKETLABOR MARKET CONDITIONSLABOR MARKETSLABOR SUPPLYLABOR SURVEYSLATIN AMERICANLOCAL LABOR MARKETLOW INCOMEMARKET WAGESMINIMUM WAGEMINIMUM WAGE LAWSMINIMUM WAGESOCCUPATIONOCCUPATIONSOLDER WORKERSPER CAPITA INCOMEPOOR FAMILIESPOVERTY LINEPOVERTY LINESPRIMARY EDUCATIONPRIMARY SCHOOLPRIMARY SCHOOL EDUCATIONPRIME AGEPRODUCTIVITYPRODUCTIVITY LEVELPRODUCTIVITY LEVELSREMUNERATIONSALARYSANCTIONSSKILLED WORKERSTRINIDAD AND TOBAGOUNEMPLOYMENTUNEMPLOYMENT RATESUNPAID WORKERSUNSKILLED WORKERUNSKILLED WORKERSWAGE BARGAININGWAGE DISPERSIONWAGE DISTRIBUTIONWAGE EARNERSWAGE EFFECTSWAGE FLOORWAGE LEVELWAGE LEVELSWAGE STRUCTUREWORK FORCEWORKERWORKERSYOUNG WORKERSYOUTHWorld Bankhttps://doi.org/10.1596/1813-9450-3870