Minimum wage legislation is potentially a powerful policy tool to help alleviate poverty in developing countries. This is especially the case when the detrimental employment effects are small. However, of critical importance is whether, and to what extent, minimum wage increases will generate...

To assess the employment effects of labor costs it is crucial to have reliable estimates of the labor cost elasticity of labor demand. Using a matched firm-worker dataset, we estimate a long run unconditional labor demand function, exploiting information on workers to correct for endogeneity in...