Revista Ensayos Sobre Política Económica (ESPE) – Macroeconomic effects of the minimum wage in Colombia
En la revista Ensayos sobre Política Económica – ESPE – divulgamos los resultados y las propuestas de política que surgen de investigaciones académicas realizadas en el Banco de la República. Cuando nos lea, tenga siempre presente que el contenido de nuestros artículos, así como los análisis y conclusiones que de ellos se derivan, son exclusiva responsabilidad de sus autores. El material divulgado en nuestra revista ESPE no compromete ni representa la opinión del Banco de la República ni la de su Junta Directiva.
Abstract
Using partial equilibrium and general equilibrium approaches, the effects of the minimum wage on the Colombian macroeconomy are thoroughly studied. With the first approach, the article analyzes the effects on variables of the labor market, income distribution, inequality, monetary poverty of families, prices, and inflation. With the general equilibrium approach, we study the effects on consumption, welfare, production, investment, inflation, and government fiscal accounts. According to the evidence, the minimum wage has negative effects on almost all the variables studied, it does not allow a fluid functioning of the labor market, and it is not fulfilling its objectives of contributing to reducing inequality and poverty. The redesign of the implementation of the minimum wage in Colombia and the way in which we are training our workforce to raise its productivity is suggested, so that we can bring the minimum wage in relation to the median wage of the economy, nowadays about 90 %, at a level similar to that of the OECD countries, close to 50%.
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