Almeida, Rita; Carneiro, Pedro - Economics Research, World Bank Group - 2009
receiving lower wages. Wage rigidity (due, say, to the minimum wage) prevents this downward adjustment at the bottom of the … inequality. They also show that, at the top of the formal wage distribution, workers bear the cost of mandated benefits by … income distribution. As a result, formal sector jobs at the bottom of the wage distribution become more attractive, inducing …