Séminaire doctorants
Bordeaux School of Economics

 

David Rivera Gonzalez

 

This paper examines the heterogeneous effects of minimum wage policies in Latin America in the presence of large informal sectors. The first two sections provide reduced-form evidence on the heterogeneous effects of continuous minimum wage hikes. The first section examines the effect on labor supply, focusing on a central yet unexplored mechanism, namely the minimum contribution rate, which links social insurance contributions to the statutory minimum wage rather than to actual earnings. In a second step, I analyze firm-level data from the World Bank Enterprise Surveys to evaluate how employers adapt to higher formal labor costs. In the third section, I develop a Dual-Sector Monopsony Model with minimum contribution floors adapted to Latin America, bridging Minimum Wages, Informality, and Contribution rates.