Thomas Gindling

The nature of minimum wages and their effectiveness as a wage floor in Costa Rica, 1976-1991

Abstract This study describes Costa Ricas complex minimum wage system and its evolution over 1976–1991, examines the trend in minimum wage to average wage in eight industries, and compares the number and characteristics of workers who earn below the minimum wage over these 16 years in the covered and uncovered sectors. We conclude that noncompliance is a major problem. On average one-third of the workers in the legally covered sector earn below the minimum wage over this period. Moreover, the same proportion earns below the minimum wage in the uncovered sectors. This evidence indicates that the law may fail its intent of assuring an adequate salary to workers without bargaining power.

Patterns and Sources of Changing Wage Inequality in Chile and Costa Rica During Structural Adjustment

Abstract During their respective periods of structural adjustment, inequality increased more rapidly in Chile than in Costa Rica. Using a new technique which measures the effects of changes in the quantities and prices of individual dimension of human capital on overall wage inequality, we identify changes in wage premiums associated with more education as an important cause of the different inequality outcomes. We present evidence that the different education price effects were due to different rates of growth in the demand for more-educated workers. Furthermore, inequality increased in Chile despite a large equalizing education quantity effect.

Changing returns to education in Taiwan: 1978-1991

Abstract We find that private rates of return in Taiwan are highest for higher education levels (for example, university) and lowest for lower education levels (for example, junior high school), and that private returns are higher for women than men at all education levels. Unlike most other studies of changing returns to education over time in developing countries, we find that private returns for all education levels are remarkably stable during 1978–1991 in Taiwan.

The performance of the labor market during recession and structural adjustment: Costa Rica in the 1980s

Abstract In this paper, we trace the evolution of indicators of labor market performance in Costa Rica throughout the 1980s, and examine the special features of the Costa Rican labor market that influenced the rapid decline (1980–1982) and rapid recovery (1982–1986) of those indicators. We find that, among other factors, legal minimum wages and a large public sector work force were important in influencing these indicators. We conclude that recovery and structural adjustment have been relatively successful in Costa Rica within a system where the labor market functions in an institutional context rather distant from the free market model.

Accounting for Changing Earnings Inequality in Costa Rica, 1980-99

After declining from the mid-1970s to the mid-1980s, inequality in monthly earnings in Costa Rica stabilised from 1987 to 1992 and then increased from 1992 to 1999. In this article, we use recently developed techniques to measure the extent to which these changes in earnings inequality were the result of changes associated with the distributions of personal and workplace characteristics of workers or the earnings differences associated with those characteristics. We present evidence that the most important cause of the fall in inequality prior to 1987 was a decline in returns to education. Inequality stopped falling in Costa Rica in the 1990s in part because returns to education stopped falling. The most important cause of rising inequality in monthly earnings in the 1990s was an increase in the proportion of workers working a non-standard work week (part-time or over-time).

Higher education planning and the wages of workers with higher education in Taiwan

Abstract A significant feature of Taiwans educational development is the high degree to which the structure of educational expansion, especially in higher education, has been strictly planned by the government. The Ministry of Education controls the number of students who are allowed to attend all institutions of higher education (both private and public). We present evidence that this control over the relative supply of workers with higher education, rather than changes in relative demand for these workers, was the more important factor causing changes in the relative wages of Taiwanese workers with higher education between 1978 and 1995. For example, decisions by education planners in the 1980s to increase the number of students enrolled in universities and junior colleges led to a fall in the wages of workers with higher education relative to the wages of workers without higher education.

The Consequences of Increased Enforcement of Legal Minimum Wages in a Developing Country: An Evaluation of the Impact of the Campaña Nacional De Salarios Mínimos in Costa Rica

In August 2010, the Costa Rican government implemented a comprehensive program to increase compliance with legal minimum wages, the Campaña Nacional de Salarios Mínimos (National Campaign for Minimum Wages). To evaluate the impact of the Campaign, the authors use a regression discontinuity (RD) approach, which compares what happened to workers who before the Campaign had been earning below the minimum wage to those who before the Campaign had been earning above the minimum wage. They analyze a panel data set with information on workers from before the Campaign began (July 2010) and after the Campaign had been in operation for some time (July 2011). The evidence supports the conclusion that the Campaign led to an increase in compliance with minimum wage laws in Costa Rica; the mean earnings of those being paid less than the minimum wage in 2010 increased by approximately 10% more than the earnings of those being paid more than the minimum wage. The Campaign led to the largest increases in the wages of women, younger workers, and less-educated workers. The authors find no evidence that the Campaign had a negative impact on the employment of full-time workers whose wages were increased. Weak evidence suggests that the Campaign had a negative impact on the employment of part-time private-sector employees. Although increased inspections mainly targeted minimum wage violations, the authors also observe an increase in compliance with a broader set of labor standards and a positive spillover effect relative to other violations of labor laws. Specifically, the analysis provides evidence that the Campaign had a positive impact on the probability that workers receive legally mandated nonwage benefits such as Social Security (which includes pension and health insurance), overtime pay, sick leave, and paid vacations.

Poverty in Latin America

SOCIAL PANORAMA OF LATIN AMERICA: 1999–2000. By Economic Commission for Latin America and the Caribbean (ECLAC). (Santiago: United Nations Publications, November 2000. Pp. 312. N.p.) PORTRAIT OF THE POOR: AN ASSETS-BASED APPROACH. Edited by Orazio Attanasio and Miguel Székely. (Baltimore, MD: The Johns Hopkins University Press, 2001. Pp. 266.

Is Hispanic Population Dispersion into Rural Counties Contributing to Local Economic Growth

24.95 paper.) NEW MARKETS, NEW OPPORTUNITIES? ECONOMIC AND SOCIAL MOBILITY IN A CHANGING WORLD. Edited by Nancy Birdsall and Carol Graham (Washington, DC: Brookings Institution Press, 2000. Pp. 331.

Single Mothers and Poverty in Costa Rica

24.95 paper.) RURAL POVERTY IN LATIN AMERICA. Edited by Ramón López and Alberto Valdés. (New York: St. Martin’s Press. 2000. Pp. 343.