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Are Minimum Wages of Importance for Employment?: A Gross Flows Analysis of Collectively Bargained Minimum Wage Employment Effects in the Swedish Hotels and Restaurants Industry 2004-2015
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
2016 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

This thesis analyses short-term effects of collectively bargained real minimumwage increases on separations from employment and the change in worked hours in the Swedish hotels and restaurants industry over the period 2004 to 2015. The empirical approach utilises the separate nature of separations and acquisitions in the data set, developing a wage gap specification in order to compare workers below (treatment group) to workers above but not more than 15 percent above (control group) the new real minimum wage implemented the following year. The rationale behind the model is that workers below the new minimum should be directly affected by the increase in the minimum wage while workers already above the new level should not. Results suggest that the distance to the new minimum (the so called wage gap) had a positive significant effect on separations, both from the individual employment contract and the industry as a whole, and a negative effect on total worked hours (assigning zero worked hours to workers separated from the industry) for older inexperienced workers (aged 20-60) during the years 2010 to 2015. This was not the case for experienced workers. However, when introducing payroll taxes to the model the estimated effects are but a fraction of the original estimates and no longer statistically significant. No clear effect on worked hours for workers still employed in the industry the next period was found. The effects for teenagers and young workers (aged 18-23) for the period 2004 to 2015 are also more uncertain: The estimations performed mostly found negligible effects on separations while results are more problematic to interpret when studying both total worked hours and hours only among workers still employed in the industry the following year.

Place, publisher, year, edition, pages
Keyword [en]
minimum wage, collective bargaining, employment, hotels, restaurants, Sweden, gross flows, separations, worked hours
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URN: urn:nbn:se:uu:diva-297075OAI: oai:DiVA.org:uu-297075DiVA: diva2:940758
Available from: 2016-06-21 Created: 2016-06-21 Last updated: 2016-06-21Bibliographically approved

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