The Effect of the Minimum Wage on Prices It is well established in the international literature that minimum wage increases compress the wages distribution. Firms respond to these higher labour costs by reducing employment, reducing profits, or raising prices. While there are hundreds of studies on the employment effect of the minimum wage, there is less than a handful studies on its profit eff...

It is sometimes argued that resistance to nominal wage cuts would justify a moderate amount of inflation in order to “grease the wheels of the labour market”. While empirical studies tend to find that nominal wages are not downwardly rigid in Anglo-Saxon economies, a number of studies suggest that downward nominal wage rigidity is more widespread among continental European countries. This paper...

The contribution of the present paper is threefold. First, we formally test whether the effect of calorie deprivation on wages is more significant/higher for the lower quantiles of workers. In the extant literature this is established through non-linear terms in the wage equation. A more satisfactory method of doing this is through quantile regressions. Second, the quantile regression approach ...

As a consequence of the rapid growth of temporary agency employment in Germany, the debate on the poor working conditions of temps, specifically their remuneration, has intensified recently. The paper shows that the wage gap for German temp workers is rather large and varies between occupation and region. But temps already suffer from a marked wage decline before entering the temporary help sec...

A large amount of recent evidence finds a negative relationship between local unemployment and wages in OECD countries, a relationship christened a ‘wage curve’. This contradicts the conventional model of the labour market in which high unemployment regions have higher wages to compensate for search and other costs. This paper discovers a wage curve in South Africa, a country with several times...

Staggered price and staggered wage contracts are commonly viewed as similar mechanisms in generating persistent real effects of monetary shocks. In this paper, we distinguish the two mechanisms in a dynamic stochastic general equilibrium framework. We show that, although the dynamic price setting and wage setting equations are alike, a key parameter governing persistence is linked to the underl...

This paper considers the wage-setting behaviour of a monopoly union facing foreign competition. Contrary to intuition, trade integration is predicted to make union wages less sensitive to foreign wage changes if union preferences are sufficiently biased towards wages relative to employment. This is confirmed empirically using sector-level time-series on EU member states, using the existence of ...

The purpose of this study is to investigate the factors affecting the manufacturing industry wage among selected developing countries based on new economic geography theory. More specifically, we use a panel data model to study the spatial structure of wages in 136 countries for the period 1998-2007. The results indicate that this theory provides a good description of the spatial structure of w...