2023-09-28 14:46:10 +00:00
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abstract: 'This paper evaluates the worker-level effects of a historically large
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and permanent increase in the minimum wage in Lithuania. Our
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identification strategy leverages variation in workers'' exposure to the
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new minimum wage, and exploits the fact that there has been no increase
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in the minimum wage in previous years, to account for heterogeneous
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labor market prospects of low-wage workers relative to high-wage
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workers. Using detailed administrative records to track workers before
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and after the policy change, we show that the minimum wage hike
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significantly increased the earnings of low-wage workers. This direct
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effect was amplified by wage spillovers reaching the median of the
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pre-policy income distribution. Overall, we find no negative effects on
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the employment prospects of low-wage workers. However, we provide
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suggestive evidence that young workers, highly exposed municipalities,
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and tradable sectors may be more negatively affected. In contrast, labor
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market concentration or the presence of envelope wages appear to be
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associated with lower job losses. Taken together, our findings imply an
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employment elasticity with respect to the minimum wage of -0.021, and an
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own-wage elasticity of -0.033, suggesting that wage gains dominated
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employment losses.'
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affiliation: 'Garcia-Louzao, J (Corresponding Author), Bank Lithuania, Totoriu G 4,
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LT-01121 Vilnius, Lithuania.
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Garcia-Louzao, Jose; Tarasonis, Linas, Bank Lithuania, Totoriu G 4, LT-01121 Vilnius,
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Lithuania.
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Garcia-Louzao, Jose; Tarasonis, Linas, Vilnius Univ, Vilnius, Lithuania.'
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author: Garcia-Louzao, Jose and Tarasonis, Linas
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author-email: jgarcialouzao@lb.lt
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author_list:
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- family: Garcia-Louzao
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given: Jose
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- family: Tarasonis
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given: Linas
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da: '2023-09-28'
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doi: 10.1016/j.jce.2022.12.002
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earlyaccessdate: JUN 2023
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eissn: 1095-7227
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files: []
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issn: 0147-5967
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journal: JOURNAL OF COMPARATIVE ECONOMICS
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keywords: Minimum wage; Employment; Wages
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keywords-plus: YOUTH EMPLOYMENT; INEQUALITY; FIRMS
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language: English
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month: JUN
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number: '2'
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number-of-cited-references: '78'
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orcid-numbers: Garcia-Louzao, Jose/0000-0002-2211-1401
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pages: 592-609
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papis_id: 7d4db23516f24efdee4302f4b848a1a1
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ref: Garcialouzao2023wageemployment
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times-cited: '0'
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title: 'Wage and Employment Impact of Minimum Wage: Evidence from Lithuania ✩'
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2023-10-01 08:15:07 +00:00
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type: article
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2023-09-28 14:46:10 +00:00
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unique-id: WOS:001019095200001
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usage-count-last-180-days: '8'
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usage-count-since-2013: '8'
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volume: '51'
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web-of-science-categories: Economics
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year: '2023'
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