Template-Type: ReDIF-Paper 1.0
Author-Name: Katalin Bodnar
Author-X-Name-First: Katalin
Author-X-Name-Last: Bodnar
Author-Workplace-Name: European Central Bank
Author-Name: Ludmila Fadejeva
Author-X-Name-First: Ludmila
Author-X-Name-Last: Fadejeva
Author-Workplace-Name: Bank of Latvia
Author-Name: Stefania Iordache
Author-X-Name-First: Stefania
Author-X-Name-Last: Iordache
Author-Workplace-Name: Banca Nationala a Romaniei,
Author-Name: Liina Malk
Author-X-Name-First: Liina
Author-X-Name-Last: Malk
Author-Workplace-Name: Eesti Pank
Author-Name: Desislava Paskaleva
Author-X-Name-First: Desislava
Author-X-Name-Last: Paskaleva
Author-Workplace-Name: Bulgarian National Bank
Author-Name: Jurga Pesliakaite
Author-X-Name-First: Jurga
Author-X-Name-Last: Pesliakaite
Author-Workplace-Name: Bank of Lithuania
Author-Name: Natasa Todorovic Jemec
Author-X-Name-First: Natasa
Author-X-Name-Last: Todorovic Jemec
Author-Workplace-Name: Banka Slovenije
Author-Name: Peter Toth
Author-X-Name-First: Peter
Author-X-Name-Last: Toth
Author-Workplace-Name: Narodna banka Slovenska,
Author-Name: Robert Wyszynski
Author-X-Name-First: Robert
Author-X-Name-Last: Wyszynski
Author-Workplace-Name: Narodowy Bank Polski
Title: How Do Firms Adjust to Rises in the Minimum Wage? Survey Evidence fromCentral and Eastern Europe
Abstract: We study the transmission channels for rises in the minimum wage using a unique firm-level dataset from eight Central and Eastern European countries. Representative samples of firms in each country were asked to evaluate the relevance of a wide range of adjustment channels following specific instances of rises in the minimum wage during the recent post-crisis period. The paper adds to the rest of literature by presenting the reactions of firms as a combination of strategies, and evaluates the relative importance of those strategies. Our findings suggest that the most popular adjustment channels are cuts in non-labour costs, rises in product prices, and improvements in productivity. Cuts in employment are less popular and occur mostly through reduced hiring rather than direct layoffs. Our study also provides evidence of potential spillover effects that rises in the minimum wage can have on firms without minimum wage workers.
Creation-Date: 2017-12-31
File-URL: https://www.bank.lv/images/stories/pielikumi/publikacijas/petijumi/wp_4-2017_en.pdf
File-Format: Application/pdf
File-URL: https://www.macroeconomics.lv/sites/default/files/2017-12/wp_4-2017_en.pdf
File-Format: Application/pdf
Number: 2017/04
Classification-JEL: D22, E23, J31 
Keywords: minimum wage, adjustment channels, firm-level survey
X-File-Ref: https://repec.bank.lv/refs/wpaper201704.txt
Handle: RePEc:ltv:wpaper:201704