A1309
Title: Minimum wages, labour market institutions, and the distribution of earnings in Iran
Authors: Massoud Karshenas - SOAS Univdersity of London (United Kingdom) [presenting]
Abstract: I examine the impact of minimum wages on the distribution of earnings in Iran. Specifically, it is shown that minimum wages have played a critical role in the distribution of earnings and the distribution of household income. A perverse relationship between minimum wages and distribution of earnings is identified, which is contrary to the observed relationships in other developed and developing countries. To explain this anomaly, the role of minimum wages in the overall wage-setting institutions in the country is analysed. This is done by a decomposition analysis of the wage distribution by reweighting methods to separate the effect of individual attributes from wage structure effects. The paper concludes by highlighting some of the broader implications of our findings for research on inflation, unemployment and competitiveness in oil economies like Iran.
