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Effects of Increasing Minimum Wages on Employment and Hours: Evidence from Sweden’s Retail Sector

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  • Skedinger, Per

    ()
    (Research Institute of Industrial Economics (IFN))

Abstract

This paper examines the effects of collectively agreed increases in real minimum wages on employment transitions and hours among manual workers in the Swedish retail sector over the period 2001–05. The findings indicate that increases in real minimum wages are associated with more separations, whereas hours are less affected because separated workers put in relatively fewer hours before being separated. Among the young, however, both employment and hours are negatively affected. Labour-labour substitution seems to be important, since increases in minimum wages promote employment among workers with higher wages than those directly affected by the increases. The assumptions of the econometric model were tested by imposing fictitious minimum wages on lower-level non-manuals in the same industry, with turnover characteristics similar to manuals but covered by a different collective agreement with non-binding actual minimum wages.

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Bibliographic Info

Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 869.

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Length: 30 pages
Date of creation: 13 Apr 2011
Date of revision:
Handle: RePEc:hhs:iuiwop:0869

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Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
Phone: +46 8 665 4500
Fax: +46 8 665 4599
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Web page: http://www.ifn.se/
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Keywords: Minimum wages; Labour-labour substitution; Employment;

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  1. Böckerman, Petri & Uusitalo, Roope, 2007. "Minimum wages and youth employment: Evidence from the Finnish retail trade sector," MPRA Paper 6113, University Library of Munich, Germany.
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