Minimum Wages in Puerto Rico: Textbook Case of a Wage Floor? / Alida Castillo Freeman, Richard B. Freeman.

Format:

Book

Author/Creator:

Freeman, Alida Castillo.

Contributor:

National Bureau of Economic Research.

Freeman, Richard B.

Series:

Working Paper Series (National Bureau of Economic Research) no. w3759.

NBER working paper series no. w3759

Language:

English

Subjects (All):

Minimum wage--Econometric models.

Minimum wage.

Labor market--Econometric models.

Labor market.

Economic history.

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Minimum Wages in Puerto Rico

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1991.

Cambridge, Mass. : National Bureau of Economic Research, 1991.

Summary:

This paper uses time series and cross-industry data on employment and wages in Puerto Rico to assess the effects of applying the U.S. minimum wage to the Puerto Rican labor market. We find that the U.S. minimum has a massive effect on the earnings distribution in Puerto Rico and that it has substantially lowered employment and altered the allocation of labor across industries. The reduction in employment is due to the fact that the minimum has a high level relative to average earnings or productivity, not to an especially high estimated elasticity of employment to the minimum. We claim that the results support the textbook model of the minimum wage more strongly than studies of the minimum in the U.S. because in Puerto Rico the U.S. minimum has "real bite."

Notes:

Print version record

June 1991.