Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/223968
Authors: 
Alexandre, Fernando
Bação, Pedro
Cerejeira, João
Costa, Hélder
Portela, Miguel
Year of Publication: 
2020
Series/Report no.: 
IZA Discussion Papers No. 13526
Abstract: 
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.
Subjects: 
minimum wage
financially distressed firms
productivity
JEL: 
E24
J38
L25
Document Type: 
Working Paper

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