Discussion Paper: The effect of minimum wage spillovers on wage dispersion in a strongly institutionalized wage bargaining system.

In this (revised) discussion paper, preceding the analysis of minimum wage effects on employment, it is demonstrated that minimum wages correlate positively with wage compression. The paper points to the endogeneity of minimum wages: between-sector effects are very large, implying that minimum wages at the sector level allow fine-tuning of the institutional wage setting mechanisms. This results in decreases of wage inequality which is not artificially created by disemployment of low-wage workers.

The paper can be consulted here.

BSMWI: Belgian Sectoral Minimum Wage Index

In order to examine the effect of minimum wages on wage inequality and the incidence of low pay, the researchers from KU Leuven have composed a data set with minimum wage floors (index 2000) from CBA’s filed at FOD WASO (Department of Work) for 43 joint committees from 2000 onwards. The data can be downloaded here.