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dc.contributor.authorBoeri, Titoen
dc.contributor.authorGaribaldi, Pietroen
dc.contributor.authorRibeiro, Martaen
dc.date.accessioned2010-05-03-
dc.date.accessioned2010-07-23T09:36:22Z-
dc.date.available2010-07-23T09:36:22Z-
dc.date.issued2010-
dc.identifier.urihttp://hdl.handle.net/10419/36956-
dc.description.abstractA large body of empirical literature indicates that, contrary to predictions from economic theory, wages in the informal sector increase after any minimum wage hike. This phenomenon was so far explained as a byproduct of a signal conveyed by statutory minimum wages to wage setting in the informal sector, as if workers in the latter had significant bargaining power. A simple matching model shows that the lighthouse effect may be induced by significant sorting and composition effects between the formal and shadow sectors in the aftermath of the increase in the minimum wage. Using data on Brazil, we test this alternative explanation of the lighthouse effect, associated with the endogenous sorting of workers by skill in the formal and informal sectors. We find that sorting accounts for at least one third of the increase in average wages in the informal sector after the minimum wage hike. This contribution of sorting to wage dynamics in the informal sector is also increasing over time.en
dc.language.isoengen
dc.publisher|aInstitute for the Study of Labor (IZA) |cBonnen
dc.relation.ispartofseries|aIZA Discussion Papers |x4890en
dc.subject.jelJ30en
dc.subject.ddc330en
dc.subject.keywordMinimum wageen
dc.subject.keywordlighthouse effecten
dc.subject.keywordsortingen
dc.subject.stwLohnbildungen
dc.subject.stwInformeller Sektoren
dc.subject.stwMindestlohnen
dc.subject.stwArbeitsmarkten
dc.subject.stwMatchingen
dc.subject.stwQualifikationen
dc.subject.stwSchätzungen
dc.subject.stwBrasilienen
dc.titleBehind the lighthouse effect-
dc.type|aWorking Paperen
dc.identifier.ppn625157443en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen

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