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Minimum wage and collective bargaining shocks: a narrative database for advanced economies

Author

Listed:
  • Afonso António
  • Jalles João Tovar

    (School of Economics and Management, Instituto Superior de Economia e Gestão (ISEG), Universidade de Lisboa, Rua do Quelhas 6, 1200-781 Lisboa, Portugal)

  • Venter Zoe

    (Universidade Catolica Portuguesa, Catolica Lisbon School of Business and Economics, Palma de Cima, 1649-023 Lisboa, Portugal)

Abstract

This paper presents and describes a new database of major minimum wage and collective bargaining (CB) shocks covering 26 advanced economies over the period 1970–2020. The main advantage of this dataset is the precise identification of the nature and date of major shocks, which is valuable in many empirical applications. Based on the dataset, we observe that major changes in minimum wages have been more frequent than in CB in the last decades, and the majority of these were implemented during the 1980s and 1990s. In our empirical application, we find that minimum wage policy reductions have a medium-run positive impact on labor productivity and they lead to a fall in the unemployment rate. CB policy liberalizations do not seem to affect either productivity or capital formation, but they have a clear medium-term effect on the labor market. Moreover, CB policy liberalizations are characterized by a greater sensitivity to the prevailing business cycle conditions at the time of the shock (vis-à-vis minimum wage reforms).

Suggested Citation

  • Afonso António & Jalles João Tovar & Venter Zoe, 2023. "Minimum wage and collective bargaining shocks: a narrative database for advanced economies," IZA Journal of Labor Policy, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 13(1), pages 1-18, January.
    • Handle: RePEc:vrs:izajlp:v:13:y:2023:i:1:p:18:n:1
    DOI: 10.2478/izajolp-2023-0001
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    More about this item

    Keywords

    labor market policies; minimum wage; collective bargaining; labor productivity; growth; local projection; C22; E24; J31; J52;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation

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