In 2000, the federal government approved a law that permitted the states to set wages floors above minimum wage. The states of Rio de Janeiro and Rio Grande do Sul adopted this law in 2001. We utilized panel data of Employment Monthly Survey from 2000 and 2001, and observed a low adherence to this law in these states. Furthermore, we get evidences of negligible effect on employment level. These results indicate a high legislation noncompliance due to low enforcement of the law, as suggested by the theory.
minimum wage; state legislation; legislation noncompliance; quantile regression for longitudinal data
