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Minimum wage, fringe benefits, overtime payments and the gender wage gap

This paper investigates the impact of an increase in the minimum wage on the gender gap at various levels of employee compansation, namely, base wage, fringe benefits, overtime payments and probability of getting these extra income components. Using the matched employer-employee database for the Portuguese labor market, we explore the 1998 amendment to the MW law that increased the minimum wage applied to employees younger than 18 years of age from 75% to 100% of the full minimum. Estimation results based on a difference-in-difference-differences strategy indicate a widening of the gender gap, caused by redistribution of fringe benefits and overtime payments following the amendment. We discuss three possible sources of redistribution: (i) discrimination, (ii) a change in the skill composition of the working males and females after the increase, and (iii) industrial differences in response to the changes in the wage floor. Estimations support the third channel as the main contributing factor while we cannot eliminate the possibility of the effect of discrimination.

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File URL: http://www3.eeg.uminho.pt/economia/nipe/docs/2010/NIPE_WP_34_2010.pdf
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Paper provided by NIPE - Universidade do Minho in its series NIPE Working Papers with number 34/2010.

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Date of creation: 2010
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Handle: RePEc:nip:nipewp:34/2010
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  1. repec:ese:iserwp:2005-25 is not listed on IDEAS
  2. Laura Giuliano, 2011. "Minimum Wage Effects on Employment, Substitution, and the Teenage Labor Supply: Evidence from Personnel Data," Working Papers 2011-12, University of Miami, Department of Economics.
  3. Kosali Ilayperuma Simon & Robert Kaestner, 2004. "Do Minimum Wages Affect Non-Wage Job Attributes? Evidence on Fringe Benefits," ILR Review, Cornell University, ILR School, vol. 58(1), pages 52-70, October.
  4. Wiji Arulampalam & Alison Booth & Mark L. Bryan, 2006. "Is There a Glass Ceiling over Europe? Exploring the Gender Pay Gap across the Wages Distribution," CEPR Discussion Papers 510, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  5. 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.
  6. 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.
  7. Tom Ahn & Peter Arcidiacono & Walter Wessels, 2011. "The Distributional Impacts of Minimum Wage Increases When Both Labor Supply and Labor Demand Are Endogenous," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 29(1), pages 12-23, January.
  8. 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.
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