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1) The document analyzes the effects of a 119% increase in the real minimum wage in Brazil from 1996 to 2012 on earnings inequality. 2) The authors develop an equilibrium search model featuring worker and firm heterogeneity to quantify the effects of the minimum wage increase. 3) Estimating the model using large administrative datasets, they find that the minimum wage hike reduced earnings inequality substantially, lowering the variance of earnings by 11 log points, with modest negative effects on employme

Author

pj

Language

EN