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Title: Minimum wages, public transfers, and development in Puerto Rico

Citation Type: Miscellaneous

Publication Year: 2016

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Abstract: Puerto Rico’s long running experiment with active wage floor and public transfer policies manifests substantial program benefits at great efficiency costs. Transfers have sheltered large segments of the population from a deep and prolonged recession and in past decades been important instruments of positive distributive change. They have also curtailed growth potential, reducing the effective labor force through retirements that occur at very early ages and through limited market entry among the low-skilled. A high wage floor has in the past driven large increases in productivity and real wages, but has also resulted in structural unemployment and a marked loss in competitiveness concentrated in the lower half of the earnings distribution. Resulting policy design interaction has contributed to an economy with scarce job opportunities and one of the lowest workforce participation rates in the world.

Url: https://wordpress.uprm.edu/economics-sotomayor/wp-content/uploads/sites/117/2018/05/LAER.pdf

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Authors: Sotomayor, Orlando

Publisher: University of Puerto Rico

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure, Other

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