Please use this identifier to cite or link to this item:
https://hdl.handle.net/1822/66110
Title: | Minimum wage and financially distressed firms: another one bites the dust |
Author(s): | Alexandre, Fernando Bação, Pedro Cerejeira, João Costa, Hélder Alberto Silva Portela, Miguel |
Keywords: | minimum wage financially distressed firms productivity |
Issue date: | 2020 |
Publisher: | Universidade do Minho. Núcleo de Investigação em Políticas Económicas (NIPE) |
Abstract(s): | Since late 2014, Portuguese Governments adopted ambitious minimum wage policies. Using linked employer-employee data, we provide an econometric evaluation of the impact of those policies. Our estimates suggest that minimum wage increases reduced employment growth and profitability, in particular for financially distressed firms. We also conclude that minimum wage increases had a positive impact on firms’ exit, again amplified for financially distressed firms. According to these results, minimum wage policies may have had a supply side effect by accelerating the exit of low profitability and low productivity firms and, thus, contributing to improve aggregate productivity through a cleansing effect. |
Type: | Working paper |
URI: | https://hdl.handle.net/1822/66110 |
Access: | Open access |
Appears in Collections: | NIPE - Documentos de Trabalho |
Files in This Item:
File | Description | Size | Format | |
---|---|---|---|---|
WP 04 2020.pdf | Minimum wage and financially distressed firms: another one bites the dust | 1,36 MB | Adobe PDF | View/Open |