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Minimum wages and employment retention: A microeconometric study for Estonia

Simona Ferraro (), Birgit HŠnilane () and Karsten Staehr ()
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Birgit HŠnilane: Ministry of Finance of the Republic of Estonia

Baltic Journal of Economics, 2018, vol. 18, issue 1, 51-67

Abstract: This paper assesses the effect of increases in the Estonian minimum wage in 2013Ð2016 on the probability of workers at different wage levels retaining employment. The effect is identified by comparing the probability of workers remaining employed after increases in the minimum wage in 2013Ð2016 with the probability of workers at comparable wage levels remaining employed in the 2009Ð2011 when the minimum wage was left unchanged. Estimations on data from the Estonian Labour Force Survey show that the increases in the minimum wage in 2013Ð2016 had no or small and imprecisely estimated effects on employment retention for the directly affected workers and similarly for those indirectly affected. These results are robust to the choice of control variables, to refinements of the treatment group and to changes in the time sample.

Keywords: Minimum wage; employment retention; wage distribution (search for similar items in EconPapers)
JEL-codes: J31 J63 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:bic:journl:v:18:y:2018:i:1:p:51-67