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Sharp Teeth or Empty Mouths? Revisiting the Minimum Wage Bite with Sectoral Data

Andrea Garnero, Stephan Kampelmann () and Francois Rycx ()

No 7351, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The paper explores the link between different institutional features of minimum wage systems and the minimum wage bite. We notably address the striking absence of studies on sectoral-level minima and exploit unique data covering 17 European countries and information from more than 1100 collective bargaining agreements. Results provide evidence for a neglected trade- off: systems with bargained sectoral-level minima are associated with higher Kaitz indices than systems with statutory floors, but also with more individuals actually paid below prevailing minima. Higher collective bargaining coverage can to some extent reduce this trade-off between sharp teeth (high wage floors) and empty mouths (noncompliance/noncoverage).

Keywords: sectoral data; minimum wage systems; collective bargaining; wage bite; Europe (search for similar items in EconPapers)
JEL-codes: J31 J33 J51 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2013-04
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Published in: British Journal of Industrial Relations, 2015, 53(4), 760–788

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Working Paper: Sharp Teeth or Empty Mouths? Revisiting the Minimum Wage Bite with Sectoral Data (2013) Downloads
Working Paper: Sharp Teeth or Empty Mouths? Revisiting the Minimum Wage Bite with Sectoral Data (2013) Downloads
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