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Minimum Wage: Development and Economic Consequences in the Czech Republic / Minimální mzda: vývoj a ekonomické souvislosti v České republice [available in Czech only]

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Abstract

The paper summarises the results of various economic concepts of minimum wage. Consecutively, it presents an analysis of the minimum wage development in the Czech Republic since its introduction in 1991 and of the impact of substantial changes in its level, which can be observed since 1999. The attention is focused on both its potential benefits in sense of reducing poverty and increasing the incomes of the poorest households, and on its potential negative impact on regional labour markets in sense of increasing unemployment. The results of the econometric analyses suggest that while there is a significant impact on increasing regional unemployment, potential benefits on raising incomes of the poor households seem to be insignificant. Therefore it seems valid to claim that minimum wage in the Czech Republic has not been a very purposeful instrument effective in decreasing poverty so far.

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Bibliographic Info

Paper provided by Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies in its series Working Papers IES with number 2007/12.

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Length: 37 pages
Date of creation: Mar 2007
Date of revision: Mar 2007
Handle: RePEc:fau:wpaper:wp2007_12

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Keywords: wage; poverty; regional unemployment;

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