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Firm-level Consequences of Large Minimum-wage Increases in the Czech and Slovak Republics

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  • Tor Eriksson
  • Mariola Pytlikova

Abstract

After an initial decline in the level of real minimum-wage rates, there were series of unusually large increases in their levels - 70 and 50 per cent - during the years 1999-2002 in the Czech and Slovak Republics, respectively. Using information from matched employee-employer data sets, we look at the impact of minimum-wage hikes on both wages and employment. Our results suggest that there are some, but not substantial, job losses in reaction to minimum-wage hikes and that the impact on firm wages is rather large, implying that further increases of similar magnitude might very well have negative consequences for employment. Copyright 2004, CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd.

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Bibliographic Info

Article provided by CEIS in its journal LABOUR: Review of Labour Economics and Industrial Relations.

Volume (Year): 18 (2004)
Issue (Month): 1 (03)
Pages: 75-103

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Handle: RePEc:bla:labour:v:18:y:2004:i:1:p:75-103

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Cited by:
  1. David Neumark & William Wascher, 2006. "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research," NBER Working Papers 12663, National Bureau of Economic Research, Inc.
  2. Jan J. Rutkowski & Stefano Scarpetta, 2005. "Enhancing Job Opportunities : Eastern Europe and the Former Soviet Union," World Bank Publications, The World Bank, number 7408, October.
  3. Kamila Fialová & Martina Mysíková, 2009. "The Minimum Wage: Labor Market Consequences in the Czech Republic," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 59(3), pages 255-274, August.

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