The heterogeneous regional effects of minimum wages in Poland

We evaluate the impact of large minimum wage hikes on employment and wage growth in Poland between 2004 and 2018. We estimate panel data models utilizing the considerable variation in wage levels, and in minimum wage bites, across 73 Polish NUTS 3 regions. We find that minimum wage hikes had a significant positive effect on wage growth and a significant negative effect on employment growth only in regions of Poland that were in the first tercile of the regional wage distribution in 2007. These effects were moderate in size, and appear to be more relevant for wages. Specifically, if the ratio of minimum wage to average wage had remained constant after 2007, by 2018, the average wages in these regions would have been 3.2% lower, while employment would have been 1.2% higher. In the remaining two-thirds of Polish regions, we find no significant effects of minimum wage hikes on average wages or on employment.     

INDUSTRY DYNAMICS AND THE MINIMUM WAGE: A PUTTY‐CLAY APPROACH

We document two new findings about the industry‐level response to minimum wage hikes. First, restaurant exit and entry both rise following a hike. Second, there is no change in employment among continuing restaurants. We develop a model of industry dynamics based on putty‐clay technology that is consistent with these findings. In the model, continuing restaurants cannot change employment, and thus industry‐level adjustment occurs gradually through exit of labor‐intensive restaurants and entry of capital‐intensive restaurants. Interestingly, the putty‐clay model matches the small estimated short‐run disemployment effect of the minimum wage found in other studies, but produces a larger long‐run disemployment effect.     

IMPACT OF THE MINIMUM WAGE ON THE INCIDENCE OF SECOND JOB HOLDING IN BRITAIN

The advent of any earnings boost, such as provided by the introduction of a minimum wage, might be expected to reduce the supply of low‐paid individuals wanting to hold a second job. This paper uses difference‐in‐differences estimation on a panel of individuals matched across successive Labour Force Surveys around the time of the introduction of the national minimum wage in the United Kingdom in order to estimate the impact of the minimum wage and its subsequent upratings on second job working. There is little evidence to suggest that the extra pay provided by the introduction of the minimum wage was sufficient to affect the incidence of second job holding significantly. However, hours worked in the main job by second job holders may have risen relative to those not covered by the minimum wage; and hours worked in second jobs may have fallen for those whose second job was initially below the minimum.     

CONSEQUENCES OF MINIMUM WAGE INDEXING

During the 1980s, the minimum wage fell relative to prices and average wages in the U.S. economy. If the minimum to average wage ratio had been constant at the level maintained through the 1970s, the minimum wage would have been $5.51 in 1993. If the 1993 minimum wage had increased to $5.51, payments to minimum wage workers would have increased by an estimated $20.3 billion, and the number of people earning that wage would have risen from 2.0 million to 14.7 million. Elasticity estimates generated from other studies indicate that employment would have fallen 240,000 (4.4%) among 16–19 year olds and 349,000 (3.0%) among 20–24 year olds. Wage payments to minimum wage workers would have substantially increased, but the effect on family income distribution would have been small. Many minimum wage workers are children living with parents or adults in a family with other earners. Consequently, 75% of minimum wage workers account for less than half of their family's income.     

AN ULTIMATUM WAGE BARGAINING EXPERIMENT ON TRADE UNION EFFICIENCY

We present an ultimatum wage bargaining experiment showing that a trade union facilitating non‐binding communication among workers, raises wages by simultaneously increasing employers’ posted offers and toughening the bargaining position of employees, without reducing overall market efficiency.     

HOW DO MINIMUM WAGE ADJUSTMENTS AFFECT WAGES IN CHINA: EVIDENCE BASED ON ADMINISTRATIVE PERSONAL INCOME TAX DATA

By using unique administrative personal income tax data covering the population of a middle‐sized Chinese city from 2009 to 2013, we explore how minimum wage adjustments affect wages of low‐wage workers. The empirical evidence documented in this paper suggests a unique pattern of minimum wage regulation: while it permits wages to stay below the prevailing minimum wage threshold temporarily, it does encourage a higher growth rate for wages below the threshold. Overall, such a pattern might help lessen any downward pressures on employment, while ensuring that low‐wage earners gradually get better off over time. (JEL J3, J6, P5)     

THE IMPACT OF THE MINIMUM WAGE ON FEMALE EMPLOYMENT IN JAPAN

This article examines the impact of the minimum wage on employment, focusing on women in their 20s and 30s, who are known to be typical low‐wage workers in Japan. The results, based on a panel estimation, suggest that the minimum wage has a measurable impact on employment; the workers whose current wage is below the revised minimum wage are about 20–30 percentage points less likely to be employed in the following year than comparable low‐wage workers who are not affected by the revision of the minimum wage. The estimation results are sensitive to the choice of the control group. (JEL J23, J38, J88)     

Effects of Local,State, and Federal Minimum Wage on Employment Growth among Teenagers in the Restaurant Industry

Over the last 20 years, local municipalities have been implementing minimum wage ordinances at an accelerated rate. These local changes, along with state and federal minimum wage increases, are included in the examination of the impact of minimum wage hikes on employment growth of teenagers in the food services and drinking places subsector. While most minimum wage research focuses on employment levels, recent contributions highlight the importance of analyzing employment growth. Following this trend, this study focuses on teenagers within the restaurant industry to test for the impact of minimum wages on inexperienced workers. Using a distributed-lag model, the results show that an increase in a minimum wage reduces employment growth for teenagers within this subsector. The effects of minimum wages within this demographic were most strongly felt in the first three years following an increase in minimum wage. Specifically, the results show that a 10% increase in the minimum wage decreases the employment growth rate by approximately 2.27% over a period of three years.

     

THE IMPACT OF PERSONALITY TRAITS ON WAGE GROWTH AND THE GENDER WAGE GAP

This paper considers the impact of personality traits on the change of the gender wage gap. Using data from the German Socioeconomic Panel (SOEP), we first explore how personality traits affect wage growth rates. Then, a decomposition analysis is performed to analyse the dynamic effects of personality traits on the change of the gender wage gap over time. Our empirical results indicate that gender differences in conscientiousness and emotional stability lead to a widening of the wage gap over time. By contrast, gender differences in extraversion lead to a narrowing of the wage gap over time.     

THE MINIMUM WAGE, WAGE SUBSIDIES, AND POVERTY

In an attempt to augment the lowest wages, the United States and several other countries utilize legal minimum wages. However, the minimum wage has potentially adverse employment effects. The analysis here suggests that an alternative policy that combines a minimum wage and a wage subsidy is superior to either by itself. Such a combination can assist the low wage worker, avoid disemployment effects, and maximize market efficiency.     

Employment effects of introducing a minimum wage: The case of Germany

Income inequality has been a major concern of economic policy makers for several years. Can minimum wages help to mitigate inequality? In 2015, the German government introduced a nationwide statutory minimum wage to reduce income inequality by improving the labour income of low-wage employees. However, the employment effects of wage increases depend on time and region specific conditions and, hence, they cannot be known in advance. Because negative employment effects may offset the income gains for low-wage employees, it is important to evaluate minimum-wage policies empirically. We estimate the employment effects of the German minimum-wage introduction using panel regressions on the state-industry-level. We find a robust negative effect of the minimum wage on marginal and a robust positive effect on regular employment. In terms of the number of jobs, our results imply a negative overall effect. Hence, low-wage employees who are still employed are better off at the expense of those who have lost their jobs due to the minimum wage.     

THE OPTIMAL MINIMUM WAGE FOR POVERTY MINIMIZATION

This paper characterizes the poverty minimizing minimum wage, and shows how it varies as productivity, inequality and market competitiveness change. We show that the optimal minimum wage is equal to the competitive wage only in special cases. In general, the former is higher than the latter. Thus, poverty minimization does not coincide with employment maximization. We also show that the optimal minimum wage always rises with productivity and, under certain conditions, falls with competitiveness and inequality. Furthermore, the higher the competitiveness and inequality, the more the optimal wage rises with productivity.     

Assessing the Possible Antipoverty Effects of Recent Rises in Age‐Specific Minimum Wages in New Zealand

Real minimum wages increased by nearly 33 percent for adults and 123 percent for teenagers in New Zealand between 1999 and 2008. Where fewer than 2 percent of workers were being paid a minimum wage at the outset of this sample period, more than 8 percent of adult workers and 60 percent of teenage workers were receiving hourly earnings close to the minimum wage by the end of this period. These policy changes provide a unique opportunity to estimate the effects of the minimum wage on poverty. Although minimum wage workers are more likely to live in the poorest households, they are relatively widely dispersed throughout the income distribution. This is particularly true of teenage minimum wage workers. Furthermore, low‐income households often do not contain any working members. We estimate that a 10 percent increase in minimum wages, even without a loss in employment or hours of work, would lower the relative poverty rate by less than one‐tenth of a percentage point.     

RESIDUAL WAGE DISPARITY AND COORDINATION UNEMPLOYMENT*

How much of residual wage dispersion can be explained by an absence of coordination among firms? To answer, we construct a dynamic directed search model with identical workers where firms can create high‐ or low‐productivity jobs and are uncoordinated in their offers to workers, calibrated to the U.S. economy. Workers can exploit ex post opportunities once approached by firms, and can conduct on‐the‐job search. The stationary equilibrium wage distribution is hump‐shaped, skewed significantly to the right, and, with baseline parameters, generates residual dispersion statistics 75–90% of those found empirically. However, the model underestimates the average duration of unemployment.     

THE SHORT‐RUN EMPLOYMENT EFFECTS OF RECENT MINIMUM WAGE CHANGES: EVIDENCE FROM THE AMERICAN COMMUNITY SURVEY

This paper presents early evidence on the employment effects of state minimum wage increases enacted between January 2013 and January 2015. As of 2015, we estimate that relatively large minimum wage increases (defined as those exceeding $1) reduced employment among low‐skilled population groups by just over 1 percentage point. Smaller minimum wage increases, as well as increases linked to inflation indexation provisions, appear to have had much smaller (and possibly positive) effects on employment over our sample period. The estimates thus raise the potential importance of nonlinearities in the minimum wage's effects, which are consistent with standard models of the labor market. (JEL H11, J08, J23)     

MINIMUM WAGE EFFECTS ON PERMANENT VERSUS TEMPORARY MINIMUM WAGE EMPLOYMENT

We estimate the effect of minimum wages on employment using the Master Files of the Canadian Labour Force Survey over the recent period 1997–2008. Particular attention is paid to the differences between permanent and temporary minimum wage workers—an important distinction not made in the existing literature. Our estimates for permanent and temporary minimum wage workers combined are at the lower end of estimates based on Canadian studies estimated over earlier time periods, suggesting that the adverse employment effects are declining over time for reasons discussed. Importantly, the adverse employment effects are substantially larger for permanent compared to temporary minimum wage workers; in fact they fall almost exclusively on permanent minimum wage workers. (JEL J30)     

Did the German Minimum Wage Reform Influence (Un)employment Growth in 2015? Evidence from Regional Data

Using the variation across space, age and sex and the variation across space and sectors, we analyse the relationship between the minimum wage and (un)employment growth in 2015. We use difference‐in‐differences specifications and instrument the bite of the minimum wage by the lagged bite. The results provide stable evidence that a higher minimum wage bite is related to a higher growth rate of regular employment. We also find stable evidence that a higher minimum wage bite is related to a lower growth rate of marginal employment. These results are consistent with a transformation of marginal to regular jobs. The relationship to total employment is slightly positive in our preferred specification but insignificant or negative in others. For unemployment, we find a positive relationship between the bite of the minimum wage and unemployment growth in our preferred specification but insignificant or negative results in others.     

The impact of minimum wages on employment of low‐wage workers

This study provides empirical evidence on the impact of a minimum wage increase on employment of workers in the formal sector who have wages below the minimum level in Vietnam. Using the difference‐in‐differences with propensity score matching and the Vietnam Household Living Standard Surveys of 2004 and 2006, the article finds that the minimum wage increase in 2005 reduced the proportion of workers having a formal sector job among low‐wage workers. Most workers who lost formal sector jobs became self‐employed.     

中国的最低工资对就业的影响

最低工资制度是政府通过法律手段保障低工资工人的收入、维护劳动者最基本的权益而对劳动力市场进行人为干预的一种政策选择,它对就业的影响引起了人们的广泛争议。本文利用我国2000-2010年30个省市自治区的面板数据,以最低工资制度最为直接的影响人群--其他人员的就业作为研究对象,采用可行的广义最小二乘（FGLS）方法考察了该制度对我国就业的影响。实证研究的结果表明,我国的最低工资水平相对于社会平均工资每提高10%,其他人员的就业在社会总就业中的比重下降约为23%,敏感性分析和动态回归把弹性范围扩大到-009~-029,这与国际上早期的时间序列研究的结论基本一致,这表明我国的最低工资制度对我国其他人员的就业产生了负面影响。