Minimum Wages and Insurance within the Firm

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

No 14943, IZA Discussion Papers from Institute of Labor Economics (IZA)

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-specific 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 passthrough uncovers a novel channel which tilts the benefits 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: 48 pages
Date: 2021-12
New Economics Papers: this item is included in nep-cwa, nep-eur, nep-lma and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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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 (2022)
Working Paper: Minimum Wages and Insurance within the Firm (2021)
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