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Setting the minimum wage

Boeri, Tito (2012) Setting the minimum wage. Labour Economics, 19 (3). pp. 281-290. ISSN 0927-5371

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Identification Number: 10.1016/j.labeco.2012.01.001

Abstract

The process leading to the setting of the minimum wage so far has been overlooked by economists. There are two common ways of setting national minimum wages: they are either government legislated or the byproduct of collective bargaining agreements, which are extended erga omnes to all workers. We develop a simple model relating the level of the minimum wage to the setting regime. Next, we exploit a new data set on minimum wages in 68 countries having a statutory national minimum level of pay in the period 1981–2005. We find that a Government legislated minimum wage is lower than a wage floor set within collective agreements. This effect survives to several robustness checks and can be interpreted as a causal effect of the setting regime on the level of the minimum wage.

Item Type: Article
Official URL: http://www.sciencedirect.com/science/article/pii/S...
Additional Information: © 2012 Elsevier B.V.
Divisions: LSE
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HB Economic Theory
Date Deposited: 01 Jul 2014 10:50
Last Modified: 20 Jan 2020 04:47
URI: http://eprints.lse.ac.uk/id/eprint/57235

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