Minimum wage – labour market rigidity factor

• Main Authors: Andreea Claudia ȘERBAN, Mirela Ionela ACELEANU
• Format: Article
• Language: English
• Published: General Association of Economists from Romania 2015-06-01
• Series: Theoretical and Applied Economics
• Subjects: minimum wage; labour market rigidity; employment; labour productivity; social inequalities
• Online Access: http://store.ectap.ro/articole/1092.pdf

Currently setting minimum wages is a common practice that targets economic and social aspects. This paper aims to analyse the evolution of the minimum wage in Romania compared to EU Member States and the effects that it generates on employment, labour productivity, reducing social and wage inequalities etc. Given the current concerns about the importance of labour market flexibility to be able to respond to different shocks, as the economic crisis, we evaluate the minimum wage burden as a factor of rigidity in the labour market in terms of its rise and the ratio between the minimum wage and the average wage and the perverse effects on employment.