Abstract
The minimum wage is a labour market institution used in the majority of countries throughout the world. This is illustrated by the fact that a large number of countries, 116 in total, have ratified one or both of the two ILO minimum wage fixing Conventions.1 In addition, many more countries have established minimum wage fixing procedures, even though they have not ratified these Conventions.2 The minimum wage has had a long and turbulent history. Today, after decades of being dismissed as a social and economic policy tool, the minimum wage is now back in favour, in part thanks to the many impact studies which have adopted a more objective approach in dealing with the issue. This chapter will show that, contrary to widespread belief, the minimum wage is commonly used by governments and social partners in developing countries. Amongst the most noticeable and promising changes in recent legislation are the attempt to extend coverage and also the more careful use of economic and social criteria for adjusting the minimum wage.
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Notes
D. Card and A.B. Krueger (1995) Myth and Measurement: The New Economics of the Minimum Wage (Princeton, NJ: Princeton University Press).
F. Eyraud and C. Saget (2005) The Fundamentals of Minimum Wage Fixing (Geneva: ILO).
Calculated from J.M. Abowd, F. Kramarz and D.N. Margolis (1999) Minimum Wages and Employment in France and the United States, NBER Working Paper No. 6996 (Washington, DC: National Bureau of Economic Research).
The impact of a minimum wage upon the wage distribution within a neighbourhood has been shown in the case of Columbia by W.F. Maloney and J. Nunez Mendez, ‘Measuring the Impact of Minimum Wages’, in J.J. Heckman and C. Pagés (eds), (2004) Law and Employment Lessons from Latin America and the Caribbean (Chicago: University of Chicago Press), pp. 109–30.
D. Grimshaw and M. Miozzo (2003) Minimum Wages and Pay Equity in Latin America: Identifying the Employrnent and Pay Equity Effects, DECLARATION Working Paper 12/2003 (Geneva: ILO).
J.M. Camargo (1998) ‘Minimum Wages in Brazil: Theory, Policy and Empirical Evidence’, Labour Management Relations Series, No. 67 (Geneva: ILO).
D. Card and A.B. Krueger (1995) Myth and Measurement: The New Economics of the Minimum Wage (Princeton, NJ: Princeton University Press).
J. Bernstein and J. Schmitt (1998) Making Work Pay: The Impact of the 1996–97 M inimum W age I ncrease (Washington, DC: Economic Policy Institute).
R. Infante, A. Marinakis and J. Velasco (2003) Minimum Wage in Chile: An Example of the Potential and Limitations of this Policy Instrument, Employment Paper 2003/52 (ILO: Geneva).
G. Standing and D. Vaughan-Whitehead (eds) (1995) Minimum Wages in Central and Eastern Europe: From Protection to Destitution (Budapest: Central European University Press).
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© 2008 International Labour Organization
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Eyraud, F., Saget, C. (2008). The Revival of Minimum Wage Setting Institutions. In: Berg, J., Kucera, D. (eds) In Defence of Labour Market Institutions. The International Labour Organization. Palgrave Macmillan, London. https://doi.org/10.1057/9780230584204_6
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DOI: https://doi.org/10.1057/9780230584204_6
Publisher Name: Palgrave Macmillan, London
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