The effects of the minimum wage in Brazil on the distribution of family incomes: 1996–2001

The Brazilian economy has long relied on the minimum wage, having first implemented a minimum in 1940. Shortly after taking office in 2003, Brazil's President raised the minimum wage by 20% and promised to double the value of the minimum wage before his term ends in 2006. The usual rationale for minimum wage increases is to bring about beneficial changes in the income distribution, by raising incomes of poor and low-income families. The goal of this paper is to evaluate the efficacy of the minimum wage in Brazil in bringing about these changes in the income distribution. We examine data drawn from Brazil's major metropolitan areas, studying the years after Brazil's hyper-inflation ended. The estimates provide no evidence that minimum wages in Brazil lift family incomes at the lower points of the income distribution; if anything some of the evidence points to adverse effects on lower-income families.     

On the nature of micro-entrepreneurship: evidence from Argentina

We analyse the nature of micro-entrepreneurship in Argentina. We focus on whether the sector resembles its counterpart in industrialized countries, characterized by the risk-taking nature of the entrepreneurial activity, or if it is the result of labour market distortions and disguised unemployment, as in the dual economy hypothesis. Our results suggest a segmentation of the micro-entrepreneur sector. Both young uneducated and middle aged highly educated salaried workers have the highest likelihood of becoming entrepreneurs. However, the first segment has a high probability of becoming own-account workers, while the probability of becoming micro-entrepreneurs with employees is strictly increasing in both age and education. Moreover, the probability of entrepreneur failure (as measured by the transition to the salaried sector) has an inverted U shape, implying that both high and low skill individuals are more likely to remain entrepreneurs.