Minimum Wages and Insurance within the Firm

Emircan Yurdagul, Effrosyni Adamopoulou, Francesco Manaresi and Omar Rachedi

No 16823, CEPR Discussion Papers from Centre for Economic Policy Research

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 pass-through 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)
Date: 2021-12
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP16823 (application/pdf)

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)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:16823

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP16823

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().