Minimum wage and employment. An analysis for Colombia, Ecuador and Peru, using cointegration technique0073

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Published: jul. 15, 2020
Keywords:
MinimumWage, Employment, Cointegration, Causality

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Brayan Tillaguango
Universidad Nacional de Loja
Fernando Jumbo
Universidad Nacional de Loja

Abstract

The objective of this research is to estimate the effect of the increase in the minimum wage on employment in Colombia, Ecuador and Peru (1990 -2018). Using data from ECLAC and the Central Bank of each of the countries and cointegration techniques of time series. We find evidence that there is a relationship in both the long and short termbetween the level of employment and minimum wages. In addition, there is no causality from minimum wages to the level of employment, which leads us to conclude that in the countries studied the theory of Stiglitz (2018), which states that raising the minimum wage have an impact " insignificant or even positive "in the level of employment. A political research derived from this research is that when the minimumwage of the countries is set, it is done around the economic situation of the country, taking as reference the economic indicators of these to have balanced salaries according to the productive structure of each one of the countries.

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How to Cite
Tillaguango, B., & Jumbo, F. (2020). Minimum wage and employment. An analysis for Colombia, Ecuador and Peru, using cointegration technique0073. Revista Económica, 5(1), 73–81. Retrieved from https://revistas.unl.edu.ec/index.php/economica/article/view/774
Issue
Vol. 5 No. 1 (2018): Revista Económica vol 5 (Julio-Diciembre 2018)
Section
RESEARCH ARTICLES
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