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Devising Minimum Wages in Emerging Markets

Jobs Group's picture

Raising awareness about Wisconsin's minimum wage, Milwaukee, August 1, 2012. Photo: Flickr/wisconsinjobsnow (Wisconsin Jobs Now)

Given the confusion about the pros and cons of minimum wages in advanced economies, let alone in emerging markets, what types of information should policy makers be armed with? In this blog, we speak with two experts on the topic – John T. Addison (Professor of Economic Theory, University of South Carolina) and David Neumark (Professor of Economics, University of California, Irvine) – both of whom stress the importance of weighing the trade-offs for their own countries, along with pinpointing who will be the winners and losers.

Demystifying the Impact of Minimum Wages

Jobs Group's picture

Singapore Clarke Quay Elgin Bridge underpass 2013 (by RSCLS street art collective). Photo: Flickr/66944824@N05 (Denis Bocquet)

In recent years, the minimum wage has become an increasingly popular policy instrument to reduce inequality in many emerging markets (like China, Hong Kong, and Cambodia), with others (like Singapore) weighing whether to adopt one. But a lot of confusion still surrounds the impact of minimum wages in advanced economies, let alone what might occur in the emerging markets. In this blog, we speak with two experts on the topic: David Neumark (Professor of Economics, University of California, Irvine) and John T. Addison (Professor of Economic Theory, University of South Carolina). They both point to some job loss, especially for skilled workers, in advanced economies.

Literacy Unplugged, Bollywood-style

Brij Kothari's picture
Photo credit: Still from Jodhaa Akbar with Same Language Subtitling, Copyright Disney UTV. Note: Subtitle in image reads "In the folds of these moments."


In India, the bulk of labor participation is in the informal sector, trapped in a vicious cycle of low skills, low wages, and low productivity. The vast majority of these individuals do not have the basic functional literacy needed for upping their job skills, and leveraging these gains to escape their cycle of poverty.The encouraging news is that there are numerous efforts under way to dramatically turn this situation around — including a successful program of using subtitles for Bollywood movies (see "Better Late than Never" in Education and Skills 2.0: New Targets and Innovative Approaches, 2014).

Universal Pension, Yes, Regressive Funding, No

David Robalino's picture

Silver miner in Potosi, Bolivia. Photo credit: ©urosrMariano Bosch, Carmen Pages, and Angel Melguizo at the Inter-American Development Bank (IDB) are proposing a new approach to expanding the coverage of pension systems in Latin America while helping create more and better jobs. Their ideas are spelled out in a new book "Better Pensions, Better Jobs: Towards Universal Coverage in Latin America and the Caribbean." The book is about Latin America but the problems discussed and proposed solutions are relevant for any middle-income country. I think the IDB's proposal is a great contribution to the debate on pension reform. Below I discuss some of the points they make that I agree with and those where I think other options could be considered.

Crafting Policies Where Informal is Normal – Part 2

Martha Chen's picture

At least half the workforce in the developing world is in the informal sector. Informal work is associated with low incomes, high risks, no benefits, and no representative voice. We recently spoke about the issue with Martha Chen, a Lecturer in Public Policy at the Harvard Kennedy School and the International Coordinator of the WIEGO Network, which seeks to improve the status of the working poor in the informal economy, especially women.

Crafting Policies Where Informal is Normal – Part 1

Martha Chen's picture

In the developing world, the informal workforce is at least half of the total workforce, and therefore subject to with low incomes, high risks, and no formal contracts or benefits. We recently spoke with Martha Chen, a Lecturer at the Harvard Kennedy School and the International Coordinator of the WIEGO Network. In part 1 of this two-part series, she argues that "informal is normal."

Doing Experiments with Socially Good but Privately Bad Treatments

David McKenzie's picture
Most experiments in development economics involve giving the treatment group something they want (e.g. cash, health care, schooling for their kids) or at least offering something they might want and can choose whether or not to take up (e.g. business training, financial education). Indeed among the most common justifications for randomization is that there is not enough of the treatment for everyone who wants it, leading to oversubscription or randomized phase-in designs.

The Illusion of Information Campaigns: Just because people don’t know about your policy, it doesn’t mean that an information campaign is needed

David McKenzie's picture
How many points do you need to qualify to migrate to Australia? What is the cost of applying? How much money do you need to set up a bank account in the Cayman Islands? What is the procedure for getting money out of these accounts when you want to spend it?

Leveraging Mobile Technology to Connect India’s Informal Sector

Sean Blagsvedt's picture

In India, since 2007, babajob.com has been using web and mobile technologies to efficiently connect employers with potential employees of low-skill jobs in the informal sector. We spoke with Sean Blagsvedt, founder and CEO of the Bangalore-based start-up, who told us that Babajob now has a presence in every state in India, with about 500,000 registered job seekers and 70,000 employers using the platform.


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