Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/290403 
Year of Publication: 
2024
Series/Report no.: 
ZEW Discussion Papers No. 24-021
Publisher: 
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung, Mannheim
Abstract: 
Minimum wages generate an asymmetric pass-through of firm shocks across workers. We establish this result leveraging employer-employee data on Italian metalmanufacturing firms, which face different wage floors that vary within occupations. In response to negative firm productivity shocks, workers close to the wage floors experience higher job separations but no wage loss. However, the wage of high-paid workers decreases, and more so in firms with higher incidence of minimum wages. A neoclassical model with complementarities across workers with different skills rationalizes these findings. Our results uncover a novel channel that tilts the welfare gains of minimum wages toward low-paid workers.
Subjects: 
Firm productivity shocks
pass-through
employer-employee data
skill complementarities
incomplete-market model
JEL: 
E24
E25
E64
J31
J38
J52
Document Type: 
Working Paper

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