Poverty Reduction and Decent Work in Developing Countries: Do Minimum Wages Help?
Author(s)
Saget, Catherine
Abstract
The impact of minimum wages on employment and poverty is a subject of enduring controversy. Saget’s opening literature review contrasts the ambivalence of theoretical predictions with empirical findings that suggest a negative correlation between minimum wages and poverty, and little – if any – disemployment effect. Drawing on minimum wage data compiled in 2000, her own empirical analysis explores minimum wage effects on poverty and employment in developing economies, including the informal sector. The effect of the minimum wage level on the level of employment appears to be insignificant, but she finds that a decent minimum wage may help to alleviate poverty.
