Minimum wage effects. Evidence for domestic workers in Uruguay by using a density discontinuity approach

In this paper we estimate the impact of the minimum wage in the domestic work sector over wages, unemployment, and formal-informal sector mobility for women in Uruguay. To achieve the objective we apply a dual-economy density discontinuity design developed by Jales (2017) using National Household Survey cross-sectional data for the period 2006 – 2016. We find significate effects of the MW over labour outcomes. Almost 20% of women increases their wages to reach MW with little negative effects on employment in the domestic sector (3%). We also find undesired effect over formality, which seem to be offset by others labour policies implemented such as inspections and awareness campaigns. The mail contribution of this paper is to generate new empirical evidence on minimum wage effects by using a recent and novel identification strategy with several advantages in the context of developing countries. Furthermore, this study contributes to the improvement of labour policies based on evidence, both for the Uruguayan case and other Latin American countries.

Tipo de documento: Propuesta de Investigación
Autoras: Alma Espino, Soledad Salvador, Karina Colombo, Sharon Katzkowicz, Gabriela Pedetti, Martina Querejeta
Año: 2016
Edición: Centro Interdisciplinario de Estudios sobre el Desarrollo-Uruguay (Ciedur), Partnership for Economic Policy (PEP), International Development Research Center (IDRC – CRDI), UK Aid Direct (UKAID)

Informal employment and labour market policies. The case of domestic workers in Uruguay