Minimum wages and the wage distribution in Estonia

Ferraro, Simona; Meriküll, Jaanika; Stæhr, Karsten

doi:10.1080/00036846.2018.1486017

Cited by 20 publications

(17 citation statements)

References 33 publications

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“…A positive wage effect for workers at and above the minimum wage is found for Hungary (Kézdi andKónya 2012, Harasztosi andLindner 2015), the Czech Republic and Slovakia (Gottvald et al 2002;Eriksson and Pytlikova 2004for the period 1999, Slovenia (Brezigar-Masten et al 2010 andLaporšek et al 2015), Latvia (Zepa 2006), and Estonia (Ferraro et al 2016). Banerjee et al (2013) find that the rise in the minimum wage in Slovenia prevented wage cuts being made and thus contributed to downward wage rigidity.…”

Section: Empirical Studies From Central and Eastern Europementioning

confidence: 97%

How do firms adjust to rises in the minimum wage? Survey evidence from Central and Eastern Europe

et al. 2018

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We study the transmission channels for rises in the minimum wage using a unique firm-level dataset from eight Central and Eastern European countries. Representative samples of firms in each country were asked to evaluate the relevance of a wide range of adjustment channels following specific instances of rises in the minimum wage during the recent post-crisis period. The paper adds to the rest of literature by presenting the reactions of firms as a combination of strategies and evaluates the relative importance of those strategies. Our findings suggest that the most popular adjustment channels are cuts in non-labour costs, rises in product prices, and improvements in productivity. Cuts in employment are less popular and occur mostly through reduced hiring rather than direct layoffs. Our study also provides evidence of potential spillover effects that rises in the minimum wage can have on firms without minimum wage workers.

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Section: Empirical Studies From Central and Eastern Europementioning

confidence: 97%

How do firms adjust to rises in the minimum wage? Survey evidence from Central and Eastern Europe

et al. 2018

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“…There is very little institutional intervention in the wage setting in Estonia--union density is negligible (6% according to ILO IRData), and employment protection legislation is less strict than on average in OECD countries (OECD Stat Extracts; employment protection was relatively strict till 2009 but that was reduced due to its imperfect enforcement). Minimum wages have not been very binding, but have contributed to the lowering of the gender wage gap (Ferraro et al 2018). As a result, the wage distribution is quite wide.…”

Section: Institutional Environment Of the Sample Country And The Datamentioning

confidence: 99%

The Role of Firms in the Gender Wage Gap

2020

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Recent research suggests that firm-level factors play a significant role in the gender wage gap. This paper adds to this literature by analysing the role of sorting between firms and bargaining within firms using the methodology of Card et al. (2016). We employ linked employer-employee data for the whole population of firms and employees from Estonia for 2006-2017. Estonia is a country with the highest gender wage gap in the EU with about two-thirds of that unexplained by conventional factors. The results show that firm-level factors are important determinants of the gender wage gap, explaining as much as 35% of the gap. We find that within-firm bargaining plays a larger role in the gender wage gap than similar prior papers. This could be related to lenient labour market institutions, as reflected in low minimum wages and union power, and to lower bargaining skills of women. Further, the role of firm-level factors in the gender wage gap have increased over time, and these are especially important at the top of the wage distribution and among workers that are more skilled. There is a heavy penalty for motherhood in wages, 4-9 log points, but this is not related to firm-specific time-invariant productivity premiums.JEL Classification: J31, J71, J16, D22

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“…12. The effect of minimum wages is not necessarily restricted to workers for whom the minimum wage is binding as there are substantial spill-over effects over other parts of the distribution of wages (see, for example, Ferraro, Merik"ull, & Staehr, 2016 for an analysis of the Estonian minimum wage). 13.…”

Section: Discussionmentioning

confidence: 99%

Wage dynamics and worker mobility during deep recessions

Pajuste

Ruffo

2018

Baltic Journal of Economics

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We provide empirical evidence of the relationship between downward wage rigidity and unemployment volatility by comparing wage dynamics and worker mobility during the Great Recession in two countries where wages adjusted very differently: Latvia and Spain. Using a panel of social security administrative data, we find that wages in Spain were rigid even during periods of rising unemployment. In contrast, Latvian wages were reduced and wage cuts affected 60 percent of jobs. At the same time, the elasticity of workers' transition rates into and out of unemployment to productivity shocks was four times higher in Spain than in Latvia, and these responses were more persistent in Spain. This evidence is consistent with theoretical models that show that unemployment volatility is higher when wages are rigid.

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Minimum wages and the wage distribution in Estonia

Cited by 20 publications

References 33 publications

How do firms adjust to rises in the minimum wage? Survey evidence from Central and Eastern Europe

How do firms adjust to rises in the minimum wage? Survey evidence from Central and Eastern Europe

The Role of Firms in the Gender Wage Gap

Wage dynamics and worker mobility during deep recessions

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