Long-Term Responses to Large Minimum Wage Shocks: Sub-Minimum and Super-Minimum Workers in Slovenia

Suzana Laporšek, Peter Orazem, Matija Vodopivec () and Milan Vodopivec
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Matija Vodopivec: University of Primorska

No 12123, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This study examines long-term effects of a minimum wage increase using an innovative identification strategy based on categorising workers according to their predicted marginal revenue products. It finds that the increase had a large and persistent disemployment effects on low-paid workers and that it triggered substitution toward more productive workers. As a consequence, the sub-minimum workers as a group lost average earnings, hours and employment compared to other workers. The adverse employment effect occurred both through a higher probability of transition from employment to non-employment and through a decreased probability of transition from non-employment to employment.

Keywords: minimum wage; employment; unemployment; hours; earnings; Slovenia (search for similar items in EconPapers)
JEL-codes: J31 J38 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2019-01
New Economics Papers: this item is included in nep-lma
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Citations: View citations in EconPapers (4)

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