Minimum Wages and Social Policy: Lessons from Developing Countries

By Wendy V. Cunningham | Go to book overview

CHAPTER 8
Report Conclusions and
Policy Considerations

This report focused on the circumstances in which the minimum wage is an effective tool for poverty reduction. It did not attempt to comprehensively cover the issue of minimum wages in LAC. The scope was limited to a description of minimum wage institutions; wage and employment effects of an increase in the minimum wage, particularly for certain demographic groups; how minimum wages affect household poverty and inequality; and the effects of the minimum wage on public expenditures. Thus, the conclusion and policy recommendations focus on the household in the short run (up to one year) and do not attempt to sort out macroeconomic implications (growth, inflation) or related labor market behaviors (job training, promotions). The issue of whether countries should have a minimum wage is not considered. Instead, the assumption is that all counties will continue their minimum wage policies, and, with a better understanding of who is affected by different levels of the minimum wage, policy makers can design social policy portfolios to fit the needs of their constituents.


Report Conclusions

Returning to the questions presented in the introduction to this report, the following main conclusions emerge.

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