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Minimum Wage: Development and Economic Consequences in the Czech Republic / Minimální mzda: vývoj a ekonomické souvislosti v České republice [available in Czech only]

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Abstract

The paper summarises the results of various economic concepts of minimum wage. Consecutively, it presents an analysis of the minimum wage development in the Czech Republic since its introduction in 1991 and of the impact of substantial changes in its level, which can be observed since 1999. The attention is focused on both its potential benefits in sense of reducing poverty and increasing the incomes of the poorest households, and on its potential negative impact on regional labour markets in sense of increasing unemployment. The results of the econometric analyses suggest that while there is a significant impact on increasing regional unemployment, potential benefits on raising incomes of the poor households seem to be insignificant. Therefore it seems valid to claim that minimum wage in the Czech Republic has not been a very purposeful instrument effective in decreasing poverty so far.

Suggested Citation

  • Kamila Fialová, 2007. "Minimum Wage: Development and Economic Consequences in the Czech Republic / Minimální mzda: vývoj a ekonomické souvislosti v České republice [available in Czech only]," Working Papers IES 2007/12, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Mar 2007.
  • Handle: RePEc:fau:wpaper:wp2007_12
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    More about this item

    Keywords

    wage; poverty; regional unemployment;

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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