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Minimum Wage, Fringe Benefits, Overtime Payments and the Gender Wage Gap

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  • Cerejeira, João

    ()
    (University of Minho)

  • Kızılca, Kemal

    ()
    (Ankara University)

  • Portela, Miguel

    ()
    (University of Minho)

  • Sá, Carla

    ()
    (University of Minho)

Abstract

Using linked employer-employee data for Portugal, we explore an amendment to the minimum wage law which increased from 75% to 100% of the full minimum wage applied to employees younger than 18. Our results show a widening of the gender wage gap following the amendment: the wage gap for minors increased 2.7 percentage points more than for other groups. This change was mainly determined by a redistribution of fringe benefits and overtime payments. We discuss three possible sources of redistribution: (i) a change in the skill composition of the working males and females after the increase in the minimum wage, (ii) industrial differences in response to the changes in the wage floor, and (iii) discrimination. Estimations support the second channel as the main contributing factor, while possible discrimination effects cannot be eliminated.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6370.

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Length: 36 pages
Date of creation: Feb 2012
Date of revision:
Handle: RePEc:iza:izadps:dp6370

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Keywords: minimum wage; overtime payments; fringe benefits; gender wage gap; minors;

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  1. Kosali Ilayperuma Simon & Robert Kaestner, 2004. "Do minimum wages affect non-wage job attributes? Evidence on fringe benefits," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 58(1), pages 52-70, October.
  2. Laura Giuliano, 2013. "Minimum Wage Effects on Employment, Substitution, and the Teenage Labor Supply: Evidence from Personnel Data," Journal of Labor Economics, University of Chicago Press, vol. 31(1), pages 155 - 194.
  3. Wiji Arulampalam & Alison L. Booth & Mark L. Bryan, 2007. "Is There a Glass Ceiling over Europe? Exploring the Gender Pay Gap across the Wage Distribution," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 60(2), pages 163-186, January.
  4. Adam J. Grossberg & Paul Sicilian, 2004. "Legal Minimum Wages and Employment Duration," Southern Economic Journal, Southern Economic Association, vol. 70(3), pages 631-645, January.
  5. Aaron Lowen & Paul Sicilian, 2009. "“Family-Friendly” Fringe Benefits and the Gender Wage Gap," Journal of Economic Interaction and Coordination, Springer, vol. 30(2), pages 101-119, June.
  6. Robinson, Helen, 2002. " Wrong Side of the Track? The Impact of the Minimum Wage on Gender Pay Gaps in Britain," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(5), pages 417-48, December.
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