Long-Term Responses to Large Minimum Wage Shocks: Sub-Minimum and Super-Minimum Workers in Slovenia

Arbeitspapier

This study examines long-term effects of a minimum wage increase using an innovative identification strategy based on categorising workers according to their predicted marginal revenue products. It finds that the increase had a large and persistent disemployment effects on low-paid workers and that it triggered substitution toward more productive workers. As a consequence, the sub-minimum workers as a group lost average earnings, hours and employment compared to other workers. The adverse employment effect occurred both through a higher probability of transition from employment to non-employment and through a decreased probability of transition from non-employment to employment.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 12123

Classification and Topics

• Classification: Wirtschaft ; Wages, Compensation, and Labor Costs: Public Policy ; Wage Level and Structure; Wage Differentials
• Subject: minimum wage ; employment ; unemployment ; hours ; earnings ; Slovenia

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Laporsek, Suzana ; Orazem, Peter F. ; Vodopivec, Matija ; Vodopivec, Milan
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/196621
• Last update: 10.03.2025, 11:41 AM CET