A First Glance at the Minimum Wage Incidence in Lithuania using Social Security Data

Linas Tarasonis and Jose Garcia-Louzao

No 23, Bank of Lithuania Discussion Paper Series from Bank of Lithuania

Abstract: This document explores the incidence of the minimum wage in Lithuania. The descriptive analysis exploits high-frequency data on monthly labor income coming from Social Security records between July 2013 and July 2020 to characterize (i) the evolution of the monthly minimum wage, (ii) the percentage of workers who earn the minimum wage, (iii) the bite of the minimum wage in the wage distribution, and (iv) the heterogeneity of the findings with respect to gender and age. The evidence shows that the minimum wage was raised 7 times with an average (real) increase of 7.3% and, on average, less than 10% of the workers earn at most the minimum wage but low-pay incidence is around 20%. In terms of the impact of the wage distribution, the minimum wage relative to the average wage in the economy fluctuates between 45 and 50 percent. Females and young workers exhibit a larger low-pay incidence and minimum wage bite.

Keywords: Minimum Wage Legislation; Labor Market Regulation (search for similar items in EconPapers)
JEL-codes: J38 J48 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2020-11-09
New Economics Papers: this item is included in nep-tra
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