GAUK No. 834218
|Principal investigator:||M.A Olena Chorna|
Mykola Babiak MA
|Description:||Minimum Wage Increase and Firm Profitability: Evidence from Poland
Policymakers and researchers still debate on the consequences of a statutory minimum wage. Proponents of this law emphasize the positive effect of the minimum wage legislation on income of employed individuals from the lower end of income distribution, while empirical evidence on employment and wage effects is considerably more mixed. Furthermore, little is known about the potentially enormous implications of the minimum wage legislation on firm profitability. Therefore, the main objective of the proposed project is to examine the impact of rising minimum wage on firms' profits. To identify this effect we will employ an identification strategy exploiting sharp changes in the statutory minimum wage in Poland induced by the specific design of minimum wage policy in this country. By the design of the law, the minimum wage in Poland has to be updated yearly and the exact change is decided each year by a designed tripartite committee. This creates a quasi-experimental setup that allows us to examine the impact of wage floors on firm profitability.
|Work in grant:|
|Finance:||GAUK No. 834218|