The Effect of the Minimum Wage on Poverty: Evidence from a Quasi-Experiment in Mexico

We analyze the effect on poverty of a significant increase in minimum wage using quasi-experimental situation Mexico. In January 2019, Mexican government announced an wage: most country it increased by 16 per cent, while 43 municipalities along U.S. border 100 cent. Using household surveys and official method for calculating labor income poverty, we implement difference-in-difference synthetic control methodologies to estimate whether this policy affected find that decreased 2.6–3.0 percentage points (11–13 cent) due larger wage. Poverty was reduced mainly reducing flow from non-poverty into poverty. However, intensity increased, because did not affect share families without among poorest households.