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Minimum wages and employment in Swedish hotels and restaurants

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  • Skedinger, Per

Abstract

This paper considers the effects of union-bargained minimum wages on transitions into and out of employment in the hotels and catering industry over the period 1979–99. This industry is characterised by a high fraction of unskilled labour input, high worker turnover and binding minimum wages. The empirical approach identifies workers affected by real minimum wage increases and decreases, respectively. Job separations and accessions for the treatment groups are then contrasted to the outcomes for control groups, with wages marginally above those of the treatment groups. Unlike previous studies, this paper also considers same-period transitions for same-wage workers who are unaffected by minimum wage changes. This procedure should help to control for unobserved differences between high- and low-wage workers and is made possible by the diversified minimum wage structure of the industry. According to the results, increasing minimum wages tend to be associated with non-negligible employment effects (except for teenagers during 1993–98). The evidence regarding decreasing minimum wages is less conclusive.
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Suggested Citation

  • Skedinger, Per, 2006. "Minimum wages and employment in Swedish hotels and restaurants," Labour Economics, Elsevier, vol. 13(2), pages 259-290, April.
  • Handle: RePEc:eee:labeco:v:13:y:2006:i:2:p:259-290
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    1. John M. Abowd & Francis Kramarz & Thomas Lemieux & David N. Margolis, 2000. "Minimum Wages and Youth Employment in France and the United States," NBER Chapters,in: Youth Employment and Joblessness in Advanced Countries, pages 427-472 National Bureau of Economic Research, Inc.
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    6. Mark B. Stewart, 2004. "The employment effects of the national minimum wage," Economic Journal, Royal Economic Society, vol. 114(494), pages 110-116, March.
    7. Stewart, Mark B & Swaffield, Joanna K, 2002. " Using the BHPS Wave 9 Additional Questions to Evaluate the Impact of the National Minimum Wage," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(0), pages 633-652, Supplemen.
    8. Boozer, Michael A., 1997. "Econometric Analysis of Panel Data Badi H. Baltagi Wiley, 1995," Econometric Theory, Cambridge University Press, vol. 13(05), pages 747-754, October.
    9. Janet Currie & Bruce C. Fallick, 1996. "The Minimum Wage and the Employment of Youth Evidence from the NLSY," Journal of Human Resources, University of Wisconsin Press, vol. 31(2), pages 404-428.
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    Cited by:

    1. David Neumark & William Wascher, 2006. "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research," NBER Working Papers 12663, National Bureau of Economic Research, Inc.
    2. Stennek, Johan, 2012. "Why Unions Reduce Wage Inequality, I - A Theory of Domino Effects," Working Papers in Economics 539, University of Gothenburg, Department of Economics, revised Jun 2015.
    3. Peter Fredriksson & Robert H. Topel, 2010. "Wage Determination and Employment in Sweden Since the Early 1990s: Wage Formation in a New Setting," NBER Chapters,in: Reforming the Welfare State: Recovery and Beyond in Sweden, pages 83-126 National Bureau of Economic Research, Inc.
    4. Jan Boone & Peter Fredriksson & Bertil Holmlund & Jan C. van Ours, 2007. "Optimal Unemployment Insurance with Monitoring and Sanctions," Economic Journal, Royal Economic Society, vol. 117(518), pages 399-421, March.
    5. Stéphanie Jamet & Thomas Chalaux & Vincent Koen, 2013. "Labour Market and Social Policies to Foster More Inclusive Growth in Sweden," OECD Economics Department Working Papers 1023, OECD Publishing.
    6. Schröder, Lena, 2004. "The role of youth programmes in the transition from school to work," Working Paper Series 2004:5, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    7. Petri Böckerman & Roope Uusitalo, 2009. "Minimum Wages and Youth Employment: Evidence from the Finnish Retail Trade Sector," British Journal of Industrial Relations, London School of Economics, vol. 47(2), pages 388-405, June.
    8. Skedinger, Per, 2007. "The Design and Effects of Collectively Agreed Minimum Wages: Evidence from Sweden," Working Paper Series 700, Research Institute of Industrial Economics.
    9. Åslund, Olof & Forslund, Anders & Liljeberg, Linus, 2017. "Labour market entry of non-Labour migrants – Swedish evidence," Working Paper Series 2017:15, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    10. Anna Baranowska-Rataj & Iga Magda, 2015. "The impact of the minimum wage on job separations and working hours among young people in Poland," Working Papers 75, Institute of Statistics and Demography, Warsaw School of Economics.
    11. Per Skedinger, 2010. "Sweden: A Minimum Wage Model in Need of Modification," Chapters,in: The Minimum Wage Revisited in the Enlarged EU, chapter 12 Edward Elgar Publishing.
    12. Lundborg , Per & Skedinger, Per, 2014. "Minimum Wages and the Integration of Refugee Immigr ants," Working Paper Series 4/14, Stockholm University, Swedish Institute for Social Research.
    13. Eliasson, Tove & Nordström Skans, Oskar, 2014. "Negotiated wage increases and the labor market outcomes of low-wage workers: evidence from the Swedish public sector," Working Paper Series 2014:10, IFAU - Institute for Evaluation of Labour Market and Education Policy.

    More about this item

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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