1997•Oxford University Research Archive (ORA) (University of Oxford)Open access
The impact of minimum wage legislation in developing countries where coverage is incomplete.
Patricia Jones
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Abstract
Abstract: This paper examines the impact of minimum wage legislation in developing countries where coverage is incomplete. Using a rich data set from Ghana, it estimates the extent to which a binding minimum wage alters employment in both the formal and informal sectors of the labor market. The data reveal that Ghana’s minimum wage policies during the 1970s and 1980s led to a reduction of formal sector jobs and an increase in informal sector jobs. In addition, there is some evidence to suggest that a large Most developing countries have minimum wage laws which, in principle, guarantee low-skilled workers a wage high enough to cover their basis needs. Such laws are popular with public policy makers because they are believed to raise the incomes of the working poor. There is, of course, a downside to minimum wage legislation. When the minimum exceeds the equilibrium wage, jobs