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Minimum wages and the wage distribution in Estonia

Simona Ferraro (), Jaanika Merikull () and Karsten Staehr ()

No wp2016-6, Bank of Estonia Working Papers from Bank of Estonia

Abstract: This paper analyses how the statutory minimum wage has affected the wage distribution in Estonia, a country with virtually little collective bargaining and relatively large wage inequality. The computations follow Lee (1999) but the effects of the minimum wage are identified by the degree to which the minimum wage binds in different labour markets defined by time, region and sector. The minimum wage affects wages in the lower tail of the distribution, but the effects are most pronounced up to the 20th percentile and then decline markedly as the wage approaches the median wage. The minimum wage is of greater importance for women than for men. Interestingly, the importance of the minimum wage for the lower tail of the wage distribution was smaller during the global financial crisis than before or after the crisis.

Keywords: inflation ex-post uncertainty; monetary policy; country effects; inflation forecasting (search for similar items in EconPapers)
JEL-codes: F14 F43 O57 (search for similar items in EconPapers)
Date: 2016-07-19, Revised 2016-08-19
New Economics Papers: this item is included in nep-tra
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Related works:
Journal Article: Minimum wages and the wage distribution in Estonia (2018) Downloads
Working Paper: Minimum Wages and the Wage Distribution in Estonia (2018) Downloads
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