Busting the Myth - The Impact of Increasing the Minimum Wage : The Experience of Romania

Heemskerk, Frank ; Voinea, Liviu ; Cojocaru, Alexandra

World Bank, Washington, DC

关键词: MINIMUM WAGE;    WAGE DISTRIBUTION;    INEQUALITY;    LABOR MARKET;    UNIT LABOR COST;   

DOI  :  10.1596/1813-9450-8632
RP-ID  :  WPS8632

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper discusses the impact of agradual, pre-announced significant increase of the minimumwage during 2013–16 in Romania. The main finding is that thepositive effects prevail when the starting level of increasein the minimum wage is very low and the economy is in anegative output gap. Evidence shows that employment hasincreased, mainly at the minimum wage level, thereforemaking a shift toward a more balanced wage distribution.This measure might have contributed to a decrease of theshadow economy and a decrease in the share of people at riskof poverty. The impact on inflation was very limited, andthe impact on the public budget was positive. Moreover,firms' profits were not affected, as the negativeimpact of the measure on unit labor costs and exports was limited.