Please use this identifier to cite or link to this item: https://hdl.handle.net/1822/66110

TitleMinimum wage and financially distressed firms: another one bites the dust
Author(s)Alexandre, Fernando
Bação, Pedro
Cerejeira, João
Costa, Hélder Alberto Silva
Portela, Miguel
Keywordsminimum wage
financially distressed firms
productivity
Issue date2020
PublisherUniversidade do Minho. Núcleo de Investigação em Políticas Económicas (NIPE)
JournalNIPE Working Paper
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.
TypeWorking paper
URIhttps://hdl.handle.net/1822/66110
Peer-Reviewedno
AccessOpen access
Appears in Collections:NIPE - Documentos de Trabalho

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