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

This paper discusses the impact of a gradual, pre-announced significant increase of the minimum wage during 2013–16 in Romania. The main finding is that the positive effects prevail when the starting level of increase in the minimum wage is very lo...

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Main Authors:	Heemskerk, Frank, Voinea, Liviu, Cojocaru, Alexandra
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2018
Subjects:	MINIMUM WAGE WAGE DISTRIBUTION INEQUALITY LABOR MARKET UNIT LABOR COST INFORMAL SECTOR INFORMAL LABOR
Online Access:	http://documents.worldbank.org/curated/en/293601540996755457/Busting-the-Myth-The-Impact-of-Increasing-the-Minimum-Wage-The-Experience-of-Romania http://hdl.handle.net/10986/30653

id	okr-10986-30653
recordtype	oai_dc
spelling	okr-10986-306532022-07-18T00:24:10Z Busting the Myth - The Impact of Increasing the Minimum Wage : The Experience of Romania Heemskerk, Frank Voinea, Liviu Cojocaru, Alexandra MINIMUM WAGE WAGE DISTRIBUTION INEQUALITY LABOR MARKET UNIT LABOR COST INFORMAL SECTOR INFORMAL LABOR This paper discusses the impact of a gradual, pre-announced significant increase of the minimum wage during 2013–16 in Romania. The main finding is that the positive effects prevail when the starting level of increase in the minimum wage is very low and the economy is in a negative output gap. Evidence shows that employment has increased, mainly at the minimum wage level, therefore making a shift toward a more balanced wage distribution. This measure might have contributed to a decrease of the shadow economy and a decrease in the share of people at risk of poverty. The impact on inflation was very limited, and the impact on the public budget was positive. Moreover, firms' profits were not affected, as the negative impact of the measure on unit labor costs and exports was limited. 2018-11-01T21:25:36Z 2018-11-01T21:25:36Z 2018-10 Working Paper http://documents.worldbank.org/curated/en/293601540996755457/Busting-the-Myth-The-Impact-of-Increasing-the-Minimum-Wage-The-Experience-of-Romania http://hdl.handle.net/10986/30653 English Policy Research Working Paper;No. 8632 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Europe and Central Asia Romania
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	MINIMUM WAGE WAGE DISTRIBUTION INEQUALITY LABOR MARKET UNIT LABOR COST INFORMAL SECTOR INFORMAL LABOR
spellingShingle	MINIMUM WAGE WAGE DISTRIBUTION INEQUALITY LABOR MARKET UNIT LABOR COST INFORMAL SECTOR INFORMAL LABOR Heemskerk, Frank Voinea, Liviu Cojocaru, Alexandra Busting the Myth - The Impact of Increasing the Minimum Wage : The Experience of Romania
geographic_facet	Europe and Central Asia Romania
relation	Policy Research Working Paper;No. 8632
description	This paper discusses the impact of a gradual, pre-announced significant increase of the minimum wage during 2013–16 in Romania. The main finding is that the positive effects prevail when the starting level of increase in the minimum wage is very low and the economy is in a negative output gap. Evidence shows that employment has increased, mainly at the minimum wage level, therefore making a shift toward a more balanced wage distribution. This measure might have contributed to a decrease of the shadow economy and a decrease in the share of people at risk of poverty. The impact on inflation was very limited, and the impact on the public budget was positive. Moreover, firms' profits were not affected, as the negative impact of the measure on unit labor costs and exports was limited.
format	Working Paper
author	Heemskerk, Frank Voinea, Liviu Cojocaru, Alexandra
author_facet	Heemskerk, Frank Voinea, Liviu Cojocaru, Alexandra
author_sort	Heemskerk, Frank
title	Busting the Myth - The Impact of Increasing the Minimum Wage : The Experience of Romania
title_short	Busting the Myth - The Impact of Increasing the Minimum Wage : The Experience of Romania
title_full	Busting the Myth - The Impact of Increasing the Minimum Wage : The Experience of Romania
title_fullStr	Busting the Myth - The Impact of Increasing the Minimum Wage : The Experience of Romania
title_full_unstemmed	Busting the Myth - The Impact of Increasing the Minimum Wage : The Experience of Romania
title_sort	busting the myth - the impact of increasing the minimum wage : the experience of romania
publisher	World Bank, Washington, DC
publishDate	2018
url	http://documents.worldbank.org/curated/en/293601540996755457/Busting-the-Myth-The-Impact-of-Increasing-the-Minimum-Wage-The-Experience-of-Romania http://hdl.handle.net/10986/30653
_version_	1764472538039058432

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

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