Nina Vishnevskaya1
  • 1 National Research University Higher School of Economics, 20 Myasnitskaya Str., Moscow, 101000, Russian Federation

The Policy of the Minimum Wage: Goals, Limitations, Consequences

2005. Vol. 9. No. 4. P. 479–504 [issue contents]
This article examines the institute of minimum wage in developed and transition economies and in a number of the developing countries as well. The primary goal of the study is to find out what social and economic goals can be reached using the institute of minimum wage and what limitations this instrument have. The special attention is paid to mechanism of minimum wage fixing, which differs conside­rably in different countries. One of the sections explores the Keitz index dynamics during the last thirty years. One of the important questions is the possible impact of the institute of minimum wage on the labour market. The author considers the mechanism of transmission of the minimum wage increases on the employment and unemployment. The paper also contains the results of the empirical research. The experience of many countries witnesses that large increases in minimum wage level lead to the stagnation of the employment, especially of the disadvantaged groups. The negative effect is larger for the companies with higher share of labour costs and more active use of unqualified labour, that is small businesses and agricultural enterprises. One of the main conclusions is that the minimum wage is not an effective tool of the poverty reduction as the majority of the recipients live in households of average and upper average income.
Citation: Vishnevskaya N. (2005) Politika minimal'noy zarabotnoy platy: tseli, ogranicheniya, posledstviya [The Policy of the Minimum Wage: Goals, Limitations, Consequences ]. Ekonomicheskiy zhurnal VShE, vol. 9, no 4, pp. 479-504 (in Russian)
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