A rapidly growing number of US cities have decided to set local minimum wages. Are minimum wages set at city level a good idea? This study examines the main trade-offs emerging from the local variation in minimum wage policies.
The informal sector accounts for a large part of the economy in most developing countries, comprising between 20-80 percent of the labour force and an equally large share of firms. Yet, we still know little about the overall labour market and welfare effects of trade liberalisation in settings characterised by extensive labour market regulation, weak enforcement, and informality, which characterize many developing economies. This research fills this gap by developing a structural equilibrium model of trade and informality.
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Labour and Trade
Arin Dube describes his study that found that, on average, raising the minimum wage increased the income of poor workers.