In Brazil, for example, where noncontributory
pensions make up a large portion of the income of many poor households and their
value is tied to the minimum wage, higher minimum wages substantially lowered
poverty between 1994 and 2004. The higher minimum wages were responsible for
32% of the unprecedented reduction in income inequality in Brazil in the 1990s and
2000s because of their impact on nonlabor incomes [11].