Minimum Wages and the Wage Distribution in Estonia

Ferraro, Simona and Meriküll, Jaanika and Staehr, Karsten (2018): Minimum Wages and the Wage Distribution in Estonia. Published in: Applied Economics , Vol. 49, No. 50 (2018): pp. 5253-5268.

Abstract

This article studies how changes in the statutory minimum wage have affected the wage distribution in Estonia, a post-transition country with little collective bargaining and relatively large wage inequality. The analyses show that the minimum wage has had substantial spillover effects on wages in the lower tail of the distribution; the effects are most pronounced up to the twentieth percentile and then decline markedly. The minimum wage has contributed to lower wage inequality and this has particularly benefitted low-wage segments of the labour market such as women and the elderly. Interestingly, the importance of the minimum wage for the wage distribution was smaller during the global financial crisis than before or after the crisis.

• Item Type: MPRA Paper
• Language: English
• Keywords: Minimum wage; wage distribution; spillover effects; inequality; Central and Eastern Europe; global financial crisis
• Subjects: D - Microeconomics > D3 - Distribution > D31 - Personal Income, Wealth, and Their Distributions; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure ; Wage Differentials; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J38 - Public Policy; P - Economic Systems > P3 - Socialist Institutions and Their Transitions > P36 - Consumer Economics ; Health ; Education and Training ; Welfare, Income, Wealth, and Poverty

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