estimated at between 2 and 12 percent of all jobs in the sector. In terms of elasticity, increases of 10 percent in the minimum wage reduced jobs for low‐skilled workers by 1.5 percent to 3.3 percent and for more qualified workers by 0.3 percent to 2.4 percent.

In Mexico, the findings of the Bell study (1997) were inconclusive. It showed that when the real minimum wage fell by 45 percent there was no effect on employment in the manufacturing sector. This result reflected the minimal effectiveness of the minimum wage, which is set at quite low levels relative to the overall median wage. Furthermore, the businesses sampled were large companies that were offering high wages, typically higher than the minimum wage. In Chile, increases over the period 1996‐2005 did result in greater unemployment, although actual job losses were less than 0.32 percent a year (Grau and Landerretche, 2011). During the Asian crisis, minimum wage increases that had been scheduled earlier, based on positive economic growth projections, continued to be implemented. However, when the crisis hit the Chilean economy, the increases were out of step with the reality that the country was facing (Marinakis and Veloso, 2006).

More recently, Cunningham and Siga (2013) found that minimum wage increases in Brazil during 1996‐2001 resulted in lost jobs, especially for workers on the lowest rungs of the pay ladder, whereas in Mexico there was no negative impact on total unemployment in 1988‐1998. These conclusions were corroborated in a more recent study by Campos et al. (2015) and also in a report of the Government of the Federal District of Mexico (2014) which evaluated the effect of the 2012 minimum wage reform. Up until 2012 there had been three minimum wage zones, A, B, and C. Zone A had the highest minimum wage and Zone C, the lowest. In 2012, the Zone B minimum wage was increased to match Zone A. That increase translated into a 3.1 percent real minimum wage increase for Zone B. Therefore, the authors of the study looked at the impact of the 2012 move to a single minimum wage for Zones A and B. The outcome, derived using the Difference‐ in‐Differences estimator, suggested that there was no negative effect on employment in Zone B, while the former Zone B workers received an immediate real increase in their wages of 2.9 percent.

The study by Maloney and Núñez Méndez (2004) also corroborated a negative correlation between employment and the minimum wage in Colombia. Based on panel data from household surveys, this study estimated that a 10 percent increase in the minimum wage during 1997‐1999 reduced employment by 1.5 percent.

Studies on Brazil suggest that minimum wage increases have had a modest negative effect on employment (Fajnzylber, 2001; Neumark et al., 2006; Lemos, 2004a). For example, in terms of elasticity, Neumark et al. (2006) found an effect of about –0.07 percent at the end of the 1990s, while Fajnzylber (2001) estimated an effect of between –0.08 and –0.05 percent in the 1980s and 1990s for workers who were earning close to the minimum wage. Lemos (2004a), in turn, found only –0.1 percent elasticity for the economy as a whole and for certain vulnerable groups. One explanation for the minimal effects on employment is that businesses were able to adjust their 8