Abstract:
Minimum wage policy is a highly controversial subject in the international literature, in which there are surprisingly contradictory theoretical and empirical findings. In this paper we focus on modelling the robust dependencies between minimum wage and net earnings for a set of 20 European Union member states during the period 2000 – 2012, for which macro data was available. We draw on panel data estimation to quantify the minimum wage impact upon earnings, where several other macroeconomic indicators were also included. The results indicate that the minimum wage has the greatest positive impact on earnings, higher even than the influence of the macroeconomic outcome (GDP).
