THE MINIMUM WAGE AS A WAGE EQUALITY POLICY: EVIDENCE FROM NORTH MACEDONIA

Marjan Petreski (), Nikica Mojsoska Blazevski and Mariko Ouchi

Economic Annals, 2019, vol. 64, issue 223, 61 - 82

Abstract: The paper aims to investi-gate if the minimum wage increase of Sep-tember 2017 resulted in better wage equal-ity in North Macedonia. The increase of 19% was sizable and included levelling up in the three sectors with a lower minimum wage: textiles, apparel, and leather. We ex-tend the ‘cell’ approach of Card (1992a) and rely on data from the Labour Force Survey 2017 and 2018. The results suggest that the 2017 increase in the minimum wage had a positive, significant, and robust effect on wages. However, the wage increases were almost entirely positioned on the left side of the wage distribution and implied wage compression up to or around the minimum wage. The bunching around the new mini-mum wage level ‘equalised’ workers: those who previously earned the new minimum wage level equalised with the less produc-tive workers who approximated their wage only by the power of the law. Hence, wage equality improved. The results confirm that the minimum wage can be an important wage equality policy, with considerably limited upward spillover effects in the cur-rent policy and institutional setup.

Keywords: minimum wage; spillover effects; North Macedonia (search for similar items in EconPapers)
JEL-codes: E24 J31 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.ekof.bg.ac.rs/wp-content/uploads/2014/04/031.pdf (application/pdf)

Related works:
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:beo:journl:v:64:y:2019:i:223:p:61-82

Ordering information: This journal article can be ordered from
http://ea.ekof.bg.ac.rs/

Access Statistics for this article

Economic Annals is currently edited by Will Bartlett

More articles in Economic Annals from Faculty of Economics and Business, University of Belgrade Contact information at EDIRC.
Bibliographic data for series maintained by Goran Petrić ().