This chapter reviews what economists have learned about the impact of labor market institutions, defined broadly as government regulations and union activity on labor outcomes in developing countries. It finds that: (1) Labor institutions vary greatly among developing countries but less than...

The objective of this study is to examine the impact that changes in minimum wage and the main income transfer programs have had on the economic participation of the population and the informal sector in Argentina. The magnitude and importance that both policies have had in the Argentine case...

This paper discusses the impact of a gradual, pre-announced significant increase of the minimum wage during 2013-16 in Romania. The main finding is that the positive effects prevail when the starting level of increase in the minimum wage is very low and the economy is in a negative output gap....

This paper contributes to the policy debate on minimum wage by highlighting its role in enforcing compliance with fiscal rules in economies where underreporting of earnings is widespread. First, I propose a simple model exploring the interaction between the minimum wage and underreporting of...

This paper investigates if changes in the minimum wage have influenced changes on the formality and informality rates, and the level of wages in Ecuador. A 12-year panel was built. It allows to overcome the short time span of household data and so to characterize changes over time. Results...

We develop a search model of informal labor markets with worker and firm heterogeneity, intra-firm bargaining with imperfect substitutability across types of workers, and a comprehensive set of labor regulations, including minimum wage. Stylized facts associated with the informal sector, such as...

Developing countries have long been struggling to fight informality, focusing on instruments such as labor legislation enforcement, temporary contracts, and changes in taxes imposed on small firms. However, improvements in the labor force’s schooling and skill level may be more effective in...