Ex-ante Evaluation of the Impact of Increases in Minimum Wages on Labor Market Outcomes in Kosovo

This paper uses microsimulation techniques to quantify the potential ex-ante impacts of several minimum wage increases on labor market outcomes in Kosovo. The results show that the overall impacts of a minimum wage increase in the baseline scenario...

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Main Authors:	Robayo-Abril, Monica, Terskaya, Anastasia, Brodmann, Stefanie
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2020
Subjects:	MINIMUM WAGE LABOR MARKET INFORMALITY PUBLIC POLICY UNEMPLOYMENT LABOR FORCE PARTICIPATION POVERTY YOUTH UNEMPLOYMENT
Online Access:	http://documents.worldbank.org/curated/en/820291597160948272/Ex-ante-Evaluation-of-the-Impact-of-Increases-in-Minimum-Wages-on-Labor-Market-Outcomes-in-Kosovo http://hdl.handle.net/10986/34354

id	okr-10986-34354
recordtype	oai_dc
spelling	okr-10986-343542022-09-20T00:11:20Z Ex-ante Evaluation of the Impact of Increases in Minimum Wages on Labor Market Outcomes in Kosovo Robayo-Abril, Monica Terskaya, Anastasia Brodmann, Stefanie MINIMUM WAGE LABOR MARKET INFORMALITY PUBLIC POLICY UNEMPLOYMENT LABOR FORCE PARTICIPATION POVERTY YOUTH UNEMPLOYMENT This paper uses microsimulation techniques to quantify the potential ex-ante impacts of several minimum wage increases on labor market outcomes in Kosovo. The results show that the overall impacts of a minimum wage increase in the baseline scenario are likely to be modest, although the impacts for some groups may be stronger. In the most extreme scenario, an increase to 250 euros per month, the simulated unemployment rate increases by 0.4 percentage point in the short term and about 0.6 percentage point in the long term. The youth unemployment rate (ages 15-24) is anticipated to increase by up to 1.1 percentage points in this scenario, a relatively large increase considering the already high levels of unemployment among this group. Similarly, unemployment among the unskilled (with primary school or less) is simulated to increase by 0.6 percentage point in the short term and up to 0.8 percentage point in the long term. The paper finds that, even if raising the minimum wage is long overdue, due to decreasing nominal wages in real terms, policy needs to strike a fine balance between protecting workers and ensuring that employment effects are not too large. 2020-08-13T15:08:20Z 2020-08-13T15:08:20Z 2020-08 Working Paper http://documents.worldbank.org/curated/en/820291597160948272/Ex-ante-Evaluation-of-the-Impact-of-Increases-in-Minimum-Wages-on-Labor-Market-Outcomes-in-Kosovo http://hdl.handle.net/10986/34354 English Policy Research Working Paper;No. 9357 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 Kosovo
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 LABOR MARKET INFORMALITY PUBLIC POLICY UNEMPLOYMENT LABOR FORCE PARTICIPATION POVERTY YOUTH UNEMPLOYMENT
spellingShingle	MINIMUM WAGE LABOR MARKET INFORMALITY PUBLIC POLICY UNEMPLOYMENT LABOR FORCE PARTICIPATION POVERTY YOUTH UNEMPLOYMENT Robayo-Abril, Monica Terskaya, Anastasia Brodmann, Stefanie Ex-ante Evaluation of the Impact of Increases in Minimum Wages on Labor Market Outcomes in Kosovo
geographic_facet	Europe and Central Asia Kosovo
relation	Policy Research Working Paper;No. 9357
description	This paper uses microsimulation techniques to quantify the potential ex-ante impacts of several minimum wage increases on labor market outcomes in Kosovo. The results show that the overall impacts of a minimum wage increase in the baseline scenario are likely to be modest, although the impacts for some groups may be stronger. In the most extreme scenario, an increase to 250 euros per month, the simulated unemployment rate increases by 0.4 percentage point in the short term and about 0.6 percentage point in the long term. The youth unemployment rate (ages 15-24) is anticipated to increase by up to 1.1 percentage points in this scenario, a relatively large increase considering the already high levels of unemployment among this group. Similarly, unemployment among the unskilled (with primary school or less) is simulated to increase by 0.6 percentage point in the short term and up to 0.8 percentage point in the long term. The paper finds that, even if raising the minimum wage is long overdue, due to decreasing nominal wages in real terms, policy needs to strike a fine balance between protecting workers and ensuring that employment effects are not too large.
format	Working Paper
author	Robayo-Abril, Monica Terskaya, Anastasia Brodmann, Stefanie
author_facet	Robayo-Abril, Monica Terskaya, Anastasia Brodmann, Stefanie
author_sort	Robayo-Abril, Monica
title	Ex-ante Evaluation of the Impact of Increases in Minimum Wages on Labor Market Outcomes in Kosovo
title_short	Ex-ante Evaluation of the Impact of Increases in Minimum Wages on Labor Market Outcomes in Kosovo
title_full	Ex-ante Evaluation of the Impact of Increases in Minimum Wages on Labor Market Outcomes in Kosovo
title_fullStr	Ex-ante Evaluation of the Impact of Increases in Minimum Wages on Labor Market Outcomes in Kosovo
title_full_unstemmed	Ex-ante Evaluation of the Impact of Increases in Minimum Wages on Labor Market Outcomes in Kosovo
title_sort	ex-ante evaluation of the impact of increases in minimum wages on labor market outcomes in kosovo
publisher	World Bank, Washington, DC
publishDate	2020
url	http://documents.worldbank.org/curated/en/820291597160948272/Ex-ante-Evaluation-of-the-Impact-of-Increases-in-Minimum-Wages-on-Labor-Market-Outcomes-in-Kosovo http://hdl.handle.net/10986/34354
_version_	1764480723177177088

Ex-ante Evaluation of the Impact of Increases in Minimum Wages on Labor Market Outcomes in Kosovo

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