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Tonin, Mirco (2011): Underreporting of earnings and the minimum wage spike. (IZA discussion paper 5942), Bonn, 16 S.

Abstract

"This paper documents a positive correlation within European labour markets between the proportion of full-time employees with earnings on the minimum wage and the extent of underreporting of earnings in the economy. Using a simple model of a competitive labour market, I show how this correlation can emerge as a result of the common dependence of both quantities on the strength of enforcement of fiscal regulation. This suggests that a high spike in the wage distribution at the minimum wage level is, in some contexts, an issue of fiscal enforcement, more than a labour market issue." (Author's abstract, IAB-Doku) ((en))

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Tonin, Mirco (2011): Minimum wage and tax evasion. Theory and evidence. In: Journal of Public Economics, Jg. 95, H. 11/12, S. 1635-1651.

Abstract

"This paper examines the interaction between minimum wage legislation and tax evasion by employed labor. I develop a model in which firms and workers may agree to report less than the true amount of earnings to the fiscal authorities. I show that introducing a minimum wage creates a spike in the distribution of declared earnings and induces higher compliance by some agents, thus reducing their disposable income. The comparison of food consumption and of the consumption-income gap before and after the massive minimum wage hike that took place in Hungary in 2001 reveals that households who appeared to benefit from the hike actually experienced a drop compared to similar but unaffected households, thus supporting the prediction of the theory." (Author's abstract, IAB-Doku) ((en))

Abstract

"The economic crisis presented considerable challenges to industrial relations across the EU. This report reviews trends and developments in the relationships between workers, employers, their respective representatives and public authorities during 2008-10. It begins with an overview of the main characteristics of industrial relations institutions before analysing the strategies and perspectives of social partners and social dialogue developments in the face of the crisis. The report then examines wage bargaining, wage flexibility and minimum wages as well as the implications for industrial relations of the transition to a low-carbon economy. Finally, the report gives an overview of EU-level social dialogue and legislative developments" (Author's abstract, IAB-Doku) ((en))

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Addison, John T. & Orgul Demet Ozturk (2010): Minimum wages, labor market institutions, and female employment and unemployment. A cross-country analysis. (IZA discussion paper 5162), Bonn, 32 S.

Abstract

"This paper estimates the effect of minimum wage regulation in 16 OECD countries, 1970-2008. Our treatment is motivated by Neumark and Wascher's (2004) seminal cross-country study using panel methods to estimate minimum wage effects among teenagers and young adults. Apart from the longer time interval examined here, a major departure of the present study is the focus on prime-age females, a group typically neglected in the component minimum wage literature. Another is our deployment of time-varying policy and institutional regressors. Yet another is our examination of unemployment and participation outcomes in addition to employment effects. We report strong evidence of adverse employment effects among adult females and lower participation, even if the unemployment effects are muted. Although we report some similar findings to Neumark and Wascher as to the role of labor market institutions and policies, we do not observe the same patterns in the institutional data; in particular, we can reject for our target group their finding of stronger disemployment effects in countries with the least regulated markets." (Author's abstract, IAB-Doku) ((en))

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Autor, David H., Alan Manning & Christopher L. Smith (2010): The contribution of the minimum wage to U.S. wage inequality over three decades. A reassessment. (NBER working paper 16533), Cambridge, Mass., 68 S. DOI:10.3386/w16533

Abstract

"We reassess the effect of state and federal minimum wages on U.S. earnings inequality, attending to two issues that appear to bias earlier work: violation of the assumed independence of state wage levels and state wage dispersion, and errors-in-variables that inflate impact estimates via an analogue of the well known division bias problem. We find that erosion of the real minimum wage raises inequality in the lower tail of the wage distribution (the 50/10 wage ratio), but the impacts are typically less than half as large as those reported in the literature and are almost negligible for males. Nevertheless, the estimated effects of the minimum wage on points of the wage distribution extend to wage percentiles where the minimum is nominally non-binding, implying spillovers. We structurally estimate these spillovers and show that their relative importance grows as the nominal minimum wage becomes less binding. Subsequent analysis underscores, however, that spillovers and measurement error (absent spillovers) have similar implications for the effect of the minimum on the shape of the lower tail of the measured wage distribution. With available precision, we cannot reject the hypothesis that estimated spillovers to non-binding percentiles are due to reporting artifacts. Accepting this null, the implied effect of the minimum wage on the actual wage distribution is smaller than the effect of the minimum wage on the measured wage distribution." (Author's abstract, IAB-Doku) ((en))

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Autor, David H., Alan Manning & Christopher L. Smith (2010): The contribution of the minimum wage to U.S. wage inequality over three decades. A reassessment. (CEP discussion paper 1025), London, 70 S.

Abstract

"We reassess the effect of state and federal minimum wages on U.S. earnings inequality, attending to two issues that appear to bias earlier work: violation of the assumed independence of state wage levels and state wage dispersion, and errors-in-variables that inflate impact estimates via an analogue of the well known division bias problem. We find that erosion of the real minimum wage raises inequality in the lower tail of the wage distribution (the 50/10 wage ratio), but the impacts are typically less than half as large as those reported in the literature and are almost negligible for males. Nevertheless, the estimated effects of the minimum wage on points of the wage distribution extend to wage percentiles where the minimum is nominally non-binding, implying spillovers. We structurally estimate these spillovers and show that their relative importance grows as the nominal minimum wage becomes less binding. Subsequent analysis underscores, however, that spillovers and measurement error (absent spillovers) have similar implications for the effect of the minimum on the shape of the lower tail of the measured wage distribution. With available precision, we cannot reject the hypothesis that estimated spillovers to non-binding percentiles are due to reporting artifacts. Accepting this null, the implied effect of the minimum wage on the actual wage distribution is smaller than the effect of the minimum wage on the measured wage distribution." (Author's abstract, IAB-Doku) ((en))

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Avouyi-Dovi, Sanvi, Denis Fougère & Erwan Gautier (2010): Wage rigidity, collective bargaining and the minimum wage. Evidence from French agreement data. (CEPR discussion paper 7932), London, 48 S.

Abstract

"Using several unique data sets on wage agreements at both the firm- and the industry-levels in France, we examine the impact of typical European wage-setting institutions on the form and the degree of wage rigidity. We highlight different stylized facts concerning wage stickiness. First, in France, the typical duration of a wage agreement is one year. Consequently, a Taylor (1980) -type model appears to reproduce appropriately the distribution of agreement durations. Some 30 percent of settlements stipulate several predetermined wage changes during the year following the date of signature of the agreement. The frequency of wage agreements is highly seasonal, but the dates at which agreements take effect are more staggered. The date at which the national minimum wage level is revised each year has a significant impact on the timetable of wage agreements, both at the firm- and at the industry-levels. Wage increases negotiated at these two levels mainly depend on the inflation regime, the firm profitability and the proportion of minimum-wage workers in the same industry." (Author's abstract, IAB-Doku) ((en))

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Basu, Arnab K., Nancy H. Chau & Ravi Kanbur (2010): Turning a blind eye: Costly enforcement, credible commitment and minimum wage laws. In: The economic journal, Jg. 120, H. 543, S. 244-269. DOI:10.1111/j.1468-0297.2009.02298.x

Abstract

"In many countries, non-compliance with minimum wage legislation is widespread and authorities may be seen as having turned a blind eye to legislation they have themselves passed. We show that turning a blind eye can indeed be an equilibrium phenomenon with ex post credibility, in a model of minimum wage policy with imperfect competition, imperfect enforcement and imperfect commitment. Since credible enforcement requires costly ex post transfer of income from employers to workers, a government concerned only with efficiency but not with distribution is shown, paradoxically, to be unable to credibly elicit efficiency improvements via a minimum wage reform." (Author's abstract, IAB-Doku) ((en))

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Belman, Dale L. & Paul Wolfson (2010): The effect of legislated minimum wage increases on employment and hours. A dynamic analysis. In: Labour, Jg. 24, H. 1, S. 1-25. DOI:10.1111/j.1467-9914.2010.00468.x

Abstract

"We present a dynamic policy simulation analysing what would have happened to wages, employment, and total hours had the federal minimum wage increased in September 1998, a year after the last actual increase in our data. Prior work suggests that employment responses take 6 years to play out. Using a time-series model for 23 low-wage industries, we find a positive response of average wages over 54 months following an increase in the minimum wage, but neither employment nor hours can be distinguished from random noise. Ignoring confidence intervals, the adjustment of hours is complete after 1 year, the adjustment of employment after no more than two and one half years." (Author's abstract, IAB-Doku) ((en))

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Boockmann, Bernhard (2010): The combined employment effects of minimum wages and labor market regulation. A meta-analysis. (IZA discussion paper 4983), Bonn, 30 S.

Abstract

"This paper provides a meta-analysis of 55 empirical studies estimating the employment effects of minimum wages in 15 industrial countries. It strongly confirms the notion that the effects of minimum wages are heterogeneous between countries. As possible sources of heterogeneity, it considers the benefit replacement ratio, employment protection and the collective bargaining system. While the results are in line with theoretical expectations, the degree to which they are robust differs across these institutions." (Author's abstract, IAB-Doku) ((en))

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Boockmann, Bernhard (2010): The combined employment effects of minimum wages and labor market regulation. A meta-analysis. (IAW-Diskussionspapiere 65), Tübingen, 35 S.

Abstract

"This paper provides a meta-analysis of 55 empirical studies estimating the employment effects of minimum wages in 15 industrial countries. It strongly confirms the notion that the effects of minimum wages are heterogeneous between countries. As possible sources of heterogeneity, it considers the benefit replacement ratio, employment protection and the collective bargaining system. While the results are in line with theoretical expectations, the degree to which they are robust differs across these institutions." (Author's abstract, IAB-Doku) ((en))

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Bosch, Gerhard (2010): Beschäftigung und Mindestlöhne. Neue Ergebnisse der empirischen Mindestlohnforschung. In: WSI-Mitteilungen, Jg. 63, H. 8, S. 404-411. DOI:10.5771/0342-300X-2010-8-404

Abstract

"Unter Bezug vor allem auf die neoklassische Arbeitsmarkttheorie zeigt der Beitrag zunächst, dass sich aus theoretischen Modellen keine eindeutigen Aussagen über die Beschäftigungswirkungen von Mindestlöhnen ableiten lassen. Ergiebiger ist die neue empirische Mindestlohnforschung. Sie macht deutlich, dass nicht nur sehr niedrige Mindestlöhne, wie sie in vielen US-Staaten gezahlt werden, beschäftigungsneutral sind, sondern auch höhere Mindestlöhne, die es in einigen westeuropäischen Staaten, aber auch in Form der 'living wages' in den USA gibt. Weiterhin können Mindestlöhne die Geschäftsmodelle von Unternehmen nachhaltig beeinflussen. Indem sie die im Niedriglohnbereich oft sehr hohe Fluktuation verringern, werden für Unternehmen Investitionen in Weiterbildung und erweiterte Aufgabenzuschnitte lohnend. Gleichzeitig sinkt der Kontrollaufwand bei Beschäftigten, die besser motiviert sind und eigenständiger arbeiten. Durch Mindestlöhne können die Extraprofite der vielfach monopsonistischen Arbeitsmarktstrukturen in Niedriglohnbereichen abgebaut und marktgerechte Löhne gesichert werden. Länder mit einem institutionellen Umfeld, das Weiterbildung, Modernisierung der Arbeitsorganisation und Innovation unterstützt, können sich höhere Mindestlöhne 'leisten' als Länder ohne solche positiven Rückkoppelungen." (Autorenreferat, IAB-Doku)

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Dockery, Alfred Michael, Richard Seymour & Rachel Ong (2010): Life on the minimum wage in Australia. An empirical investigation. In: Australian Journal of Labour Economics, Jg. 13, H. 1, S. 1-26.

Abstract

"From 2006 to 2009, Federal minimum wages in Australia were set by the Australian Fair Pay Commission. This paper uses data from the Household, Income and Labour Dynamics in Australia panel survey to investigate the circumstances of persons who are paid at or near the minimum wage, and thus potentially affected by the wage determinations. Net disposable incomes for actual and potential minimum wage workers are modelled in and out of work to investigate the implications of the wage determinations on work incentives. In addition, a range of measures of socioeconomic status and wellbeing are inspected. Comparisons are made with selected groups of non-employed persons and those with higher earnings to highlight the potential costs and benefits for affected individuals, and hence the potential trade-offs faced in setting minimum wages if we accept that increases in minimum wages reduce employment opportunities." (Author's abstract, IAB-Doku) ((en))

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Dolton, Peter, Chiara Rosazza-Bondibene & Jonathan Wadsworth (2010): Employment, inequality and the UK National Minimum Wage over the medium-term. (CEP discussion paper 1007), London, 33 S.

Abstract

"This paper assesses the impact of the National Minimum Wage (NMW) on employment and inequality in the UK over the decade since its introduction in 1999. Identification is facilitated by using variation in the bite of the NMW across local labour markets and the different sized year on year up ratings of the NMW. We use an 'incremental differences-in-differences' (IDiD) estimator which allows us to estimate the effects of the NMW in each year since its introduction. We find that an increased bite of the NMW is associated with falls in lower tail wage inequality. Moreover, while the average employment effect of the NMW over the entire period is broadly neutral, there are small but significant positive employment estimates from 2003 onward, when the average bite of the NMW was at its highest since its introduction." (Author's abstract, IAB-Doku) ((en))

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Dube, Arindrajit, T. William Lester & Michael Reich (2010): Minimum wage effects across state borders. Estimates using contiguous counties. In: The Review of Economics and Statistics, Jg. 92, H. 4, S. 945-964.

Abstract

"We use policy discontinuities at state borders to identify the effects of minimum wages on earnings and employment in restaurants and other low-wage sectors. Our approach generalizes the case study method by considering all local differences in minimum wage policies between 1990 and 2006. We compare all contiguous county-pairs in the United States that straddle a state border and find no adverse employment effects. We show that traditional approaches that do not account for local economic conditions tend to produce spurious negative effects due to spatial heterogeneities in employment trends that are unrelated to minimum wage policies. Our findings are robust to allowing for long-term effects of minimum wage changes." (Author's abstract, IAB-Doku) ((en))

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Hoffmann, Nick (2010): Die Höhe der gesetzlichen Mindestlöhne in Europa 2010. In: Ifo-Schnelldienst, Jg. 63, H. 2, S. 38-39.

Abstract

"Während es in Deutschland bislang nur verbindliche Mindestlöhne für einzelne Branchen und Berufe gibt, existiert in 22 der 27 EU-Mitgliedsländer zum 1. Januar 2010 ein branchenübergreifender gesetzlicher Mindestlohn. Die Höhe der gesetzlichen Mindestlöhne in der Europäischen Union beträgt bei einer 40-Stunden-Woche 122 EURO pro Monat in Bulgarien und geht bis zu monatlich 1 641 EURO in Luxemburg." (Autorenreferat, IAB-Doku)

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Kahn, Lawrence M. (2010): Labor market policy. A comparative view on the costs and benefits of labor market flexibility. (IZA discussion paper 5100), Bonn, 36 S.

Abstract

"I review theories and evidence on wage-setting institutions and labor market policies in an international comparative context. These include collective bargaining, minimum wages, employment protection laws, unemployment insurance (UI), mandated parental leave, and active labor market policies (ALMPs). Since it is unlikely that an unregulated private sector would provide the income insurance these institutions do, these policies may enhance economic efficiency. However, to the extent that unemployment or resource misallocation results from such measures, these efficiency gains may be offset. Overall, Scandinavia and Central Europe follow distinctively more interventionist policies than the English speaking countries in the Northern Hemisphere. Possible explanations for such differences include vulnerability to external market forces and ethnic homogeneity. I then review evidence on the impacts of these policies and institutions. While the interventionist model appears to cause lower levels of wage inequality and high levels of job security to incumbent workers, it also in some cases leads to the relegation of new entrants (disproportionately women, youth and immigrants) as well as the less skilled to temporary jobs or unemployment. Making labor markets more flexible could bring these groups into the regular labor market to a greater extent, at the expense of higher levels of economic insecurity for incumbents and higher levels of wage inequality. The Danish model of loosening employment protections while providing relatively generous UI benefits with strict job search requirements holds out the possibility of reducing barriers for new entrants and the less skilled while maintaining some level of income insurance." (Author's abstract, IAB-Doku) ((en))

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Kahn, Lawrence M. (2010): Labor market policy. A comparative view on the costs and benefits of labor market flexibility. (CESifo working paper 3140), München, 39 S.

Abstract

"I review theories and evidence on wage-setting institutions and labor market policies in an international comparative context. These include collective bargaining, minimum wages, employment protection laws, unemployment insurance (UI), mandated parental leave, and active labor market policies (ALMPs). Since it is unlikely that an unregulated private sector would provide the income insurance these institutions do, these policies may enhance economic efficiency. However, to the extent that unemployment or resource misallocation results from such measures, these efficiency gains may be offset. Overall, Scandinavia and Central Europe follow distinctively more interventionist policies than the English speaking countries in the Northern Hemisphere. Possible explanations for such differences include vulnerability to external market forces and ethnic homogeneity. I then review evidence on the impacts of these policies and institutions. While the interventionist model appears to cause lower levels of wage inequality and high levels of job security to incumbent workers, it also in some cases leads to the relegation of new entrants (disproportionately women, youth and immigrants) as well as the less skilled to temporary jobs or unemployment. Making labor markets more flexible could bring these groups into the regular labor market to a greater extent, at the expense of higher levels of economic insecurity for incumbents and higher levels of wage inequality. The Danish model of loosening employment protections while providing relatively generous UI benefits with strict job search requirements holds out the possibility of reducing barriers for new entrants and the less skilled while maintaining some level of income insurance." (Author's abstract, IAB-Doku) ((en))

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Langevin, Manon (2010): Minimum wage. In: Perspectives on Labour and Income, Jg. 11, H. 3, S. 14-22.

Abstract

"All provinces and territories set minimum wages in their employment standards legislation. This update uses the Labour Force Survey to examine the characteristics of those who work at or below the minimum wage for experienced adults in each jurisdiction. The incidence of working for minimum wage has increased each year since 2006 but remains concentrated among youth, particularly young women." (Author's abstract, IAB-Doku) ((en))

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Maloney, Tim & Gail Pacheco (2010): Interpreting changes in minimum wage incidence rates. In: Australian Journal of Labour Economics, Jg. 13, H. 3, S. 219-240.

Abstract

"Statutory minimum wages increased substantially in New Zealand between 2000 and 2008. Where less than three per cent of workers were being paid the minimum wage in the late 1990s, this figure increased to more than ten per cent of workers by 2008. However, it is not obvious how this rise in the minimum wage incidence rate should be interpreted. The problem is that minimum wages can have behavioural effects. A higher wage floor could reduce the proportion of minimum wage workers in an economy by eliminating low-wage jobs. Recent New Zealand experience provides a unique opportunity for estimating this behavioural impact. The substantial gap between adult and teenage minimum wages was eliminated immediately in 2001 for 18 and 19 year-olds and gradually by 2008 for 16 and 17 year-olds. We find little evidence of an overall behavioural effect. Increases in incidence rates were not diminished by losses in low-wage employment. However, we find compelling evidence that minimum wage incidence for an age group is reduced by increases in minimum wages for neighbouring age groups." (Author's abstract, IAB-Doku) ((en))