Lindner, A;
Harasztosi, P;
(2019)
Who Pays for the Minimum Wage?
American Economic Review
, 102
(4)
i-vii.
10.1257/aer.102.4.i.
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Abstract
This paper provides a comprehensive assessment of the margins along which firms responded to a large and persistent minimum wage increase in Hungary. We show that employment elasticities are negative but small even four years after the reform; that around 75 percent of the minimum wage increase was paid by consumers and 25 percent by firm owners; that firms responded to the minimum wage by substituting labor with capital; and that dis-employment effects were greater in industries where passing the wage costs to consumers is more difficult. We estimate a model with monopolistic competition to explain these findings.
| Type: | Article |
|---|---|
| Title: | Who Pays for the Minimum Wage? |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1257/aer.102.4.i |
| Publisher version: | https://doi.org/10.1257/aer.102.4.i |
| Language: | English |
| Additional information: | This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions. |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL SLASH UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10072193 |
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