 Minimum wages and worker retention: the roles of labour concentration and employment protectionAndy Snell, Enzo Almeida, Pedro Martins and Jonathan P. Thomas Nova SBE Working Paper Series from Universidade Nova de Lisboa, Nova School of Business and Economics Abstract: How are incumbent workers impacted by minimum wage increases? Is labour market concentration an important moderating factor? We address these questions by presenting a new model, drawing on comprehensive employer-employee matched panel data from Portugal, and considering individual mandated wage rises from both national and collectively bargained minimum wages. We find that employment protection plays a key role in these effects: workers under permanent contracts are almost completely insulated from the exit hazards associated with ‘wage bites’ while workers in temporary (fixed-term) contracts are exposed to these hazards. Labour concentration can significantly reduce negative effects on temporary workers, by up to 60%. A model of monopsonistic competition with firing costs rationalises these patterns. Keywords: Minimum wages; Collective bargaining; Temporary contracts; Labour market power (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:unl:unlfep:wp689 Access Statistics for this paper More papers in Nova SBE Working Paper Series from Universidade Nova de Lisboa, Nova School of Business and Economics Contact information at EDIRC. |
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