This paper examines the effect of the minimum wage unification in Colombia after 1984. A “natural experiment” framework is used to compare the changes in different employment variables between urban areas (control group) and rural municipalities (treatment group). Census data from the 70’s and 80’s, which has never been applied to evaluate the effects of an employment policy, is used in this work. The results differ from most estimations in existing literature within the Colombian context. Aggregate effects evidence an increase between 1.8 and 2.1 percentage points in the employment-population ratio in rural municipalities, although it seems to have no effect over the unemployment rate. Furthermore, evidence is provided regarding heterogeneous effects by population subgroups.
