Please use this identifier to cite or link to this item: https://hdl.handle.net/1822/77250

TitleMinimum wage and financially distressed firms: Another one bites the dust
Author(s)Alexandre, Fernando
Bação, P.
Cerejeira, João
Costa, H.
Portela, Miguel
KeywordsFinancially distressed firms
Minimum wages
Productivity
JEL classification J38
L25
Issue date2022
PublisherElsevier
JournalLabour Economics
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.
TypeArticle
URIhttps://hdl.handle.net/1822/77250
DOI10.1016/j.labeco.2021.102088
ISSN0927-5371
Publisher versionhttps://www.sciencedirect.com/science/article/pii/S0927537121001238
Peer-Reviewedyes
AccessRestricted access (UMinho)
Appears in Collections:EEG - Artigos em revistas de circulação internacional com arbitragem científica

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