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 4:

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

Increase in

Range of Toughness Measure

Lowest
(30.0)

Median
(55.5)

Highest
(89.0)

Tot. Emp.

0.0106

0.00346

-0.0059

Cov. Emp.

0.0127

0.00556

-0.0038

Table 5: Impact of Minimum Wages on the Log of the Number
of Hours Worked

Total
Economy

Covered

Sector

Self-
Employment

Toughness

0.0055

0.0064 c

0.0223 b

(0.0035)

(0.0035)

(0.0091)

(Toughness)2

-0.00004

-0.000045 c

-0.00017 b

(0.00003)

(0.000025)

(0.000066)

Time Dummies

yes

yes

yes

Industry Dummies

yes

yes

yes

Constant

3.503 a

3.508 a

2.835 a

(0.132)

(0.130)

(0.334)

Adjusted R2

0.80

0.80

0.79

No. of Observations

91

91

91

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

15



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