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 2:

Impact of Changes in the Toughness of
the Minimum Wage on Inequaltiy

Range of Toughness Measure

Lowest

Median

Highest

Increase in

(30.0)

(55.5)

(89.0)

Gini

-0.0195

-0.0093

0.0041

Theil

-0.0346

-0.0173

0.00552

Table 3:

Impact of Minimum wages on the Log of Employment

Total
employment

Covered Sector

Employment

Self-
Employment

Toughness

0.019 c

0.0211 c

0.016

(0.011)

(0.0118)

(0.19)

(Toughness)2

-0.00014 c

-0.00014 c

-0.00018

(0.00007)

(0.00009)

(0.00014)

Time Dummies

yes

yes

yes

Industry Dummies

yes

yes

yes

Adjusted R2

0.97

0.97

0.97

No. of Observations

91

91

91

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

14



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