TY  - RPRT
        AU  - Derenoncourt, Ellora
AU  - Gerard, Francois
AU  - Lagos, Lorenzo
AU  - Montialoux, Claire
        TI  - Minimum Wages and Informality
        PY  - 2025/Oct/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 18234
        UR  - https://www.iza.org/publications/dp18234
        AB  - How do minimum wages affect informality? We study the near-doubling of the real minimum wage from 2000 to 2009 in Brazil, where 46% of the workforce is informal. Using labor force surveys covering the informal sector, we show the minimum wage exhibits near full passthrough to informal employees working in formal firms, about half of all informal employees. The formal-to-informal reallocation elasticity with respect to the formal wage is small: -0.28. Our findings illustrate how minimum wages can positively affect living standards for workers thought beyond the reach of labor law, a sizable share of the workforce in developing economies.
        KW  - informality
KW  - minimum wages
KW  - inequality
        ER  -