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Minimum Wage: Labour Market Consequences in the Czech Republic

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Author Info
Kamila Fialová () (Komerční Banka, Prague, Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic)
Martina Mysíková () (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic, Institute of Sociology of the Academy of Sciences, Prague)

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Abstract

This paper aims to quantify the impact of the minimum wage on labour market performance in the Czech Republic. Using regional data for 1995-2004, it estimates the effect of the minimum wage adjusted for regional wage differential on the regional unemployment. Consequently, using detail individual data from 2004/2005, we analyze the annual hikes in the minimum wage that allow us to estimate employment probabilities for workers with wage level at, or close to, the new minimum wage. The aim is to reveal whether the most endangered groups of workers exhibited significantly different employment probabilities. Our results reveal that the minimum wage has had a significant impact on increasing regional unemployment and reducing the employment probabilities of low-paid workers.

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Publisher Info
Paper provided by Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies in its series Working Papers IES with number 2009/06.

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Length: 21 pages
Date of creation: Feb 2009
Date of revision: Feb 2009
Handle: RePEc:fau:wpaper:wp2009_06

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Related research
Keywords: minimum wage; employment probability; unemployment;

Find related papers by JEL classification:
E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search

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This page was last updated on 2009-12-1.

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