Firm-Level Consequences of Large Minimum-Wage Increases in the Czech and Slovak Republics

29 Pages Posted: 13 Apr 2004

See all articles by Tor Eriksson

Tor Eriksson

Aarhus University - Department of Economics

Mariola Pytliková

Central European Labour Studies Institute (CELSI); VSB - Technical University of Ostrava - Faculty of Economics; University College London - CReAM - Centre for Research and Analysis of Migration; IZA Institute of Labor Economics; Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute)

Abstract

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.

Suggested Citation

Eriksson, Tor and Pytliková, Mariola, Firm-Level Consequences of Large Minimum-Wage Increases in the Czech and Slovak Republics. Available at SSRN: https://ssrn.com/abstract=516146

Tor Eriksson (Contact Author)

Aarhus University - Department of Economics ( email )

Fuglesangs Allé 4
Aarhus, 8210
Denmark
45 87164978 (Phone)

Mariola Pytliková

Central European Labour Studies Institute (CELSI) ( email )

Zvolenská 29
Bratislava, 82109
Slovakia

VSB - Technical University of Ostrava - Faculty of Economics ( email )

Sokolska 33
Ostrava 1, 701 21
Czech Republic

University College London - CReAM - Centre for Research and Analysis of Migration ( email )

Drayton House
30 Gordon Street
London, WC1H 0AX
United Kingdom

IZA Institute of Labor Economics ( email )

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

Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute) ( email )

P.O. Box 882
7 Politickych veznu
Prague 1, 111 21
Czech Republic

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