Mindestlohnreformen in Südamerika – ökonomische Rechtfertigung und praktische Umsetzung

Applying various indicators, this paper estimates the need for minimum wage reform in South America as seen by the neoclassic paradigm. In addition, an inventory of minimum wage reforms is prepared and compared with the need for reforms. The first result of the paper shows that, with the exception of Paraguay and Ecuador, the need for reform of minimum wages in South America is low since distortions resulting from minimum wage legislation and minimum wage levels are generally limited. Secondly, reforms have not been implemented in countries with the most rigid minimum wage regimes but in countries in which labour market rigidity induced by minimum wages is low in the situation prior to the reform (e.g. Argentina). Thus, there appears to be no causal relation between the scope of need for minimum wage reform and the likelihood of reform implementation.