Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/252322 
Year of Publication: 
2021
Series/Report no.: 
JRC Working Papers on Taxation and Structural Reforms No. 06/2021
Publisher: 
European Commission, Joint Research Centre (JRC), Seville
Abstract: 
This paper analyses the first-round effects of hypothetical minimum wage increases on social outcomes in 21 EU countries with a statutory national minimum wage based on a microsimulation approach using EUROMOD. The methodological challenges related to the use of available EU household survey data are described, along with the choices made to address these challenges. The paper assesses hypothetical scenarios in which countries with a statutory national minimum wage increase their minimum wage to various reference values, set in relation to the gross national median and average wage. The model simulations suggest that minimum wage increases can significantly reduce in-work poverty, wage inequality and the gender pay gap, while generally improving the public budget balance. The implied wage increases for the beneficiaries are substantial, while the implied increases in the aggregate wage bill and, as a consequence, possible negative employment impacts, are generally modest.
Subjects: 
minimum wage
microsimulation
European Union
wage inequality
in-work poverty
gender pay gap
JEL: 
H31
I32
J31
Creative Commons License: 
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Document Type: 
Working Paper

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