For several years Brazilian minimum wage (MW) has been going through an intense process of growth. Different authors have argued that an important part of the improvement in income distribution can be attributed to increased MW in recent past. Using income elasticities with respect to MW, this paper seeks to estimate the effects of current MW adjustment policy on improving income distribution. The results of simulations show that the MW contributed greatly in recent years through the labor market as well as through pensions and other official income transfers.
Image: © IRD - Emilie Stoll