Firm-Level Consequences of Large Minimum-Wage Increases in the Czech and Slovak Republics
29 Pages Posted: 13 Apr 2004
After an initial decline in the level of real minimum-wage rates, there were series of unusually large increases in their levels - 70 and 50 per cent - during the years 1999-2002 in the Czech and Slovak Republics, respectively. Using information from matched employee-employer data sets, we look at the impact of minimum-wage hikes on both wages and employment. Our results suggest that there are some, but not substantial, job losses in reaction to minimum-wage hikes and that the impact on firm wages is rather large, implying that further increases of similar magnitude might very well have negative consequences for employment.
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