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A First Glance at the Minimum Wage Incidence in Lithuania using Social Security Data

Author

Listed:
  • Linas Tarasonis

    (Bank of Lithuania, Vilnius University)

  • Jose Garcia-Louzao

    (Bank of Lithuania)

Abstract

This document explores the incidence of the minimum wage in Lithuania. The descriptive analysis exploits high-frequency data on monthly labor income coming from Social Security records between July 2013 and July 2020 to characterize (i) the evolution of the monthly minimum wage, (ii) the percentage of workers who earn the minimum wage, (iii) the bite of the minimum wage in the wage distribution, and (iv) the heterogeneity of the findings with respect to gender and age. The evidence shows that the minimum wage was raised 7 times with an average (real) increase of 7.3% and, on average, less than 10% of the workers earn at most the minimum wage but low-pay incidence is around 20%. In terms of the impact of the wage distribution, the minimum wage relative to the average wage in the economy fluctuates between 45 and 50 percent. Females and young workers exhibit a larger low-pay incidence and minimum wage bite.

Suggested Citation

  • Linas Tarasonis & Jose Garcia-Louzao, 2020. "A First Glance at the Minimum Wage Incidence in Lithuania using Social Security Data," Bank of Lithuania Discussion Paper Series 23, Bank of Lithuania.
  • Handle: RePEc:lie:dpaper:23
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    References listed on IDEAS

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    More about this item

    Keywords

    Minimum Wage Legislation; Labor Market Regulation;

    JEL classification:

    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy

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