Domestic Violence, Labor Market, and Minimum Wage: Theory and Evidence

Abstract

Abstract This paper examines the impact of minimum wage on domestic violence, considering employment status of both the woman and her partner, as well as formal or informal employment. The study focuses on physical, sexual, and psychological violence, proposing two channels: the woman’s channel based on economic dependence theory, and the partner channel based on theories of financial stress and relative resources. Various empirical strategies, including cross-sectional regression, diff-in-diff, and triple difference, are employed using data from the demographic and family health survey. The findings indicate that increasing the minimum wage reduces domestic violence against women, considering direct effects and the influence of both the woman and her partner. Despite concerns about the informal labor market in Peru and the benefits of minimum wage, this research suggests positive societal effects such as reduced domestic violence.