Using matched employer-employee data, I empirically and theoretically study the effects of increased minimum wages in Uruguay. My calibrated model includes oligopsonistic competition and heterogeneous firms. I find that despite the almost doubling of the minimum wage, there was little effect on the aggregate markdown and the extent of misallocation.

This paper studies how top earners in Uruguay responded to a 2012 tax reform that raised top labor income tax rates. Using administrative data and a difference-in-differences approach, we find that high-income taxpayers reduced reported labor income and shifted income toward corporate and capital sources. The reform increased tax revenue but had limited effects on inequality, as income shifting weakened its redistributive impact.