Minimum Wage, Fringe Benefits, Overtime Payments and the Gender Wage Gap

36 Pages Posted: 3 Mar 2012

See all articles by Joao Cerejeira

Joao Cerejeira

University of Minho - Economic Policies Research Unit (NIPE); University of Minho - Department of Economics

Fikret Kemal Kizilca

affiliation not provided to SSRN

Miguel Portela

University of Minho; IZA Institute of Labor Economics

Carla Sa

Vrije Universiteit Amsterdam, School of Business and Economics; University of Minho

Abstract

Using linked employer-employee data for Portugal, we explore an amendment to the minimum wage law which increased from 75% to 100% of the full minimum wage applied to employees younger than 18. Our results show a widening of the gender wage gap following the amendment: the wage gap for minors increased 2.7 percentage points more than for other groups. This change was mainly determined by a redistribution of fringe benefits and overtime payments. We discuss three possible sources of redistribution: (i) a change in the skill composition of the working males and females after the increase in the minimum wage, (ii) industrial differences in response to the changes in the wage floor, and (iii) discrimination. Estimations support the second channel as the main contributing factor, while possible discrimination effects cannot be eliminated.

Keywords: minimum wage, overtime payments, fringe benefits, gender wage gap, minors

JEL Classification: J31, J32, J71

Suggested Citation

Cerejeira Silva, Joao and Kizilca, Fikret Kemal and Portela, Miguel and Sa, Carla, Minimum Wage, Fringe Benefits, Overtime Payments and the Gender Wage Gap. IZA Discussion Paper No. 6370, Available at SSRN: https://ssrn.com/abstract=2015186 or http://dx.doi.org/10.2139/ssrn.2015186

Joao Cerejeira Silva (Contact Author)

University of Minho - Economic Policies Research Unit (NIPE) ( email )

Campus de Gualtar
Braga, 4710-057
Portugal

University of Minho - Department of Economics ( email )

Braga 4710-057
Portugal

Fikret Kemal Kizilca

affiliation not provided to SSRN

Miguel Portela

University of Minho ( email )

Braga, 4700
Portugal

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Carla Sa

Vrije Universiteit Amsterdam, School of Business and Economics ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands
+31(0)20 551 3538 (Phone)
+31(0)20 551 3555 (Fax)

University of Minho

Braga, 4700
Portugal

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