IDEAS home Printed from https://ideas.repec.org/a/prg/jnlpol/v2020y2020i4id1285p423-442.html
   My bibliography  Save this article

Kontroverze konceptu minimální mzdy, aplikace na Českou republiku
[Concept of Minimum Wage Controversy: The Case of the Czech Republic]

Author

Listed:
  • Helena Chytilová
  • Petr Frejlich

Abstract

The issue of minimum wage is highly topical in the context of the so-called minimum wage controversy, which contradicts the attitude of the neoclassical school. The aim of this paper is to analyse the effect of minimum wage increase together with effects of changes in other exogenous variables such as GDP growth rate, inflation rate, unemployment compensation and other social benefits on the real unemployment rate in the Czech Republic in 2006-2018. Linear regression models are tested using the Cochrane-Orcutt method. The effect of minimum wage increase on the rate of unemployment proved to be insignificant in the period 2006-2018. A negative effect of GDP growth rate was confirmed in 2006-2018, while unemployment benefits seemed to have a positive effect on the unemployment rate. The results show a negative effect of increasing minimum wage on the unemployment rate of women in 2011-2018, in line with the neoclassical theory. The conclusions of this paper have significant economic implications for minimum wage policy.

Suggested Citation

  • Helena Chytilová & Petr Frejlich, 2020. "Kontroverze konceptu minimální mzdy, aplikace na Českou republiku [Concept of Minimum Wage Controversy: The Case of the Czech Republic]," Politická ekonomie, Prague University of Economics and Business, vol. 2020(4), pages 423-442.
    • Handle: RePEc:prg:jnlpol:v:2020:y:2020:i:4:id:1285:p:423-442
    DOI: 10.18267/j.polek.1285
    as

    Download full text from publisher

    File URL: http://polek.vse.cz/doi/10.18267/j.polek.1285.html
    Download Restriction: free of charge
    File URL: http://polek.vse.cz/doi/10.18267/j.polek.1285.pdf
    Download Restriction: free of charge
    File URL: https://libkey.io/10.18267/j.polek.1285?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. John T. Addison & Orgul Demet Ozturk, 2012. "Minimum Wages, Labor Market Institutions, and Female Employment: A Cross-Country Analysis," ILR Review, Cornell University, ILR School, vol. 65(4), pages 779-809, October.
    2. Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-793, September.
    3. Sidney Webb, 1912. "The Economic Theory of a Legal Minimum Wage," Journal of Political Economy, University of Chicago Press, vol. 20, pages 973-973.
    4. Charles Brown & Curtis Gilroy & Andrew Kohen, 1982. "The Effect of the Minimum Wage on Employment and Unemployment: A Survey," NBER Working Papers 0846, National Bureau of Economic Research, Inc.
    5. Mark B. Stewart, 2004. "The employment effects of the national minimum wage," Economic Journal, Royal Economic Society, vol. 114(494), pages 110-116, March.
    6. Brown, Charles & Gilroy, Curtis & Kohen, Andrew, 1982. "The Effect of the Minimum Wage on Employment and Unemployment," Journal of Economic Literature, American Economic Association, vol. 20(2), pages 487-528, June.
    7. Daniel Aaronson & Eric French, 2007. "Product Market Evidence on the Employment Effects of the Minimum Wage," Journal of Labor Economics, University of Chicago Press, vol. 25(1), pages 167-200.
    8. Andrew M. Melnyk, 1996. "The Minimum Wage and Unemployment in Poland: Lessons for Cuba's Transition," Annual Proceedings, The Association for the Study of the Cuban Economy, vol. 6.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Roy E. Bailey & Timothy J. Hatton & Kris Inwood, 2016. "Atmospheric Pollution and Child Health in Late Nineteenth Century Britain," CEH Discussion Papers 052, Centre for Economic History, Research School of Economics, Australian National University.
    2. Tomas Kucera, 2020. "Are Employment Effects of Minimum Wage the Same Across the EU? A Meta-Regression Analysis," Working Papers IES 2020/2, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Jan 2020.
    3. George Economides & Thomas Moutos, 2014. "Minimum Wages as a Redistributive Device in the Long Run," CESifo Working Paper Series 5052, CESifo.
    4. Cristian Valeriu Paun & Radu Nechita & Alexandru Patruti & Mihai Vladimir Topan, 2021. "The Impact of the Minimum Wage on Employment: An EU Panel Data Analysis," Sustainability, MDPI, vol. 13(16), pages 1-17, August.
    5. Brian Bell & Stephen Machin, 2018. "Minimum Wages and Firm Value," Journal of Labor Economics, University of Chicago Press, vol. 36(1), pages 159-195.
    6. Juan A. Correa & Francisco Parro, 2020. "On the heterogeneous short‐term effects of minimum wages on labor demand," International Journal of Economic Theory, The International Society for Economic Theory, vol. 16(2), pages 184-195, June.
    7. Dolton, Peter & Bondibene, Chiara Rosazza & Stops, Michael, 2015. "Identifying the employment effect of invoking and changing the minimum wage: A spatial analysis of the UK," Labour Economics, Elsevier, vol. 37(C), pages 54-76.
    8. 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.
    9. Muravyev, Alexander & Oshchepkov, Aleksey, 2013. "Minimum Wages, Unemployment and Informality: Evidence from Panel Data on Russian Regions," IZA Discussion Papers 7878, Institute of Labor Economics (IZA).
    10. Mario Bossler & Hans-Dieter Gerner, 2020. "Employment Effects of the New German Minimum Wage: Evidence from Establishment-Level Microdata," ILR Review, Cornell University, ILR School, vol. 73(5), pages 1070-1094, October.
    11. Otterby, Dawn & Crawley, Andrew & Gabe, Todd, 2023. "Effects of the Minimum Wage on U.S. County Labor Markets," MPRA Paper 116162, University Library of Munich, Germany.
    12. Schumann, Mathias, 2017. "The effects of minimum wages on firm-financed apprenticeship training," Labour Economics, Elsevier, vol. 47(C), pages 163-181.
    13. Isaac Sorkin, 2015. "Are There Long-Run Effects of the Minimum Wage?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 18(2), pages 306-333, April.
    14. Seltzer, Andrew & Borland, Jeff, 2016. "The Impact of the 1896 Factory and Shops Act on Victorian Labour Markets," IZA Discussion Papers 10388, Institute of Labor Economics (IZA).
    15. Gautié, Jérôme, 2015. "D'un siècle à l'autre, salaire minimum, science économique et débat public aux États-Unis, en France et au Royaume-Uni (1890-2015)," CEPREMAP Working Papers (Docweb) 1518, CEPREMAP.
    16. David Neumark & Peter Shirley, 2021. "Myth or Measurement: What Does the New Minimum Wage Research Say about Minimum Wages and Job Loss in the United States?," NBER Working Papers 28388, National Bureau of Economic Research, Inc.
    17. Dickens, Richard & Machin, Stephen & Manning, Alan, 1998. "Estimating the effect of minimum wages on employment from the distribution of wages: A critical view," Labour Economics, Elsevier, vol. 5(2), pages 109-134, June.
    18. Omar Al-Ubaydli & John A. List, 2019. "How natural field experiments have enhanced our understanding of unemployment," Nature Human Behaviour, Nature, vol. 3(1), pages 33-39, January.
    19. David Neumark, 2019. "The Econometrics and Economics of the Employment Effects of Minimum Wages: Getting from Known Unknowns to Known Knowns," German Economic Review, Verein für Socialpolitik, vol. 20(3), pages 293-329, August.
    20. Lucia Pániková & Martina Brezová, 2011. "Influence of minimum wage on labour market – case of Slovak Republic," EcoMod2011 3512, EcoMod.

    More about this item

    Keywords

    unemployment; minimum wage; Kaitz index; Cochrane-Orcutt estimation; minimum-wage controversy; new economics of minimum wage;
    All these keywords.

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • B13 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Neoclassical through 1925 (Austrian, Marshallian, Walrasian, Wicksellian)
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:prg:jnlpol:v:2020:y:2020:i:4:id:1285:p:423-442. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Stanislav Vojir (email available below). General contact details of provider: https://edirc.repec.org/data/uevsecz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.