Minimum Wages and Insurance Within the Firm

Effrosyni Adamopoulou, Francesco Manaresi (), Omar Rachedi and Emircan Yurdagul

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: Minimum wages alter the allocation of firm-idiosyncratic risk across workers. To establish this result, we focus on Italy, and leverage employer-employee data matched to firm balance sheets and hand-collected wage floors. We find a relatively larger pass-through of firm-specic labor-demand shocks into wages for the workers whose earnings are far from the floors, but who are employed by establishments intensive in minimum-wage workers. We study the welfare implications of this fact using an incomplete-market model. The asymmetric pass-through uncovers a novel channel which tilts the benets of removing minimum wages toward high-paid employees at the expense of low-wage workers.

Keywords: Firm-specific shocks; pass-through; minimum wages; linked employer-employee data; general equilibrium; complementarities (search for similar items in EconPapers)
JEL-codes: E24 E25 E64 J31 J38 J52 (search for similar items in EconPapers)
Pages: 46
Date: 2022-01
New Economics Papers: this item is included in nep-lma and nep-mac
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Citations: View citations in EconPapers (2)

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https://www.crctr224.de/research/discussion-papers/archive/dp326

Related works:
Working Paper: Minimum wages and insurance within the firm (2024)
Working Paper: Minimum Wages and Insurance Within the Firm (2022)
Working Paper: Minimum Wages and Insurance within the Firm (2021)
Working Paper: Minimum Wages and Insurance within the Firm (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2022_326

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