Minimum Wage and Poverty in Brazil : A General Equilibrium Approach

The available estimations about the effect of minimum wage on poverty relies on partial equilibrium analysis. We estimate these effects in Brazil through a general equilibrium framework, dealing with lots of indirect effects of minimum wage. Using a computable general equilibrium model we simulate the poverty level in Brazil if only minimum wage have changed. Our results shows that an increase on minimum wage increases, although slightly, the poverty level, when the social security benefits are not adjusted. However the poverty level tend to decrease when these benefits are adjusted