The Impact of Minimum Wages on Wage Inequality and Employment in the Formal and Informal Sector in Costa Rica



William Davidson Institute Working Paper 479

Table 1:

Effect of Minimum Wage on Wage Dispersion

Covered
Sector

Self-
Employed

Panel A: log of coefficient
of variation

Toughness

Toughness2

Time Dummies

Industry dummies

-0.015

(0.015)
0.00008

(0.00010)
Yes
Yes

-0.0039

(0.0158)
0.00005

(0.00011)
Yes
Yes

Adjusted R2

0.80

0.77

Panel B: log of Gini

Toughness

Toughness2

Time Dummies

Industry dummies

-0.0315 a

(0.013)

0.0002 b

(0.0001)

Yes

Yes

-0.015

(0.013)
0.0001

(0.0001)
Yes
Yes

Adjusted R2

0.73

0.79

Panel C: Theil mean log
deviation

Toughness

Toughness2

Time Dummies

Industry Dummies

-0.055 b

(0.025)

0.00034 c

(0.00018)
Yes

Yes

-0.034

(0.031)

0.00029

(0.00022)
Yes

Yes

Adjusted R2

0.69

0.60

No. of Observations

91

91

aSignificant at the 1% level; bsignificant at the 5%
level; csignificant at the 10% level.

13



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