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Ex-Ante Evaluation of the Impact of Increases in Minimum Wages on Labor Market Outcomes in Kosovo / Monica Robayo-Abril.
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- Robayo-Abril, Monica.
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Employment and Unemployment.
- Informality.
- Labor Force Participation.
- Labor Market.
- Labor Markets.
- Labor Policies.
- Minimum Wage.
- Poverty.
- Public Policy.
- Social Protections and Labor.
- Unemployment.
- Wages, Compensation and Benefits.
- Youth Unemployment.
- Local Subjects:
- Employment and Unemployment.
- Informality.
- Labor Force Participation.
- Labor Market.
- Labor Markets.
- Labor Policies.
- Minimum Wage.
- Poverty.
- Public Policy.
- Social Protections and Labor.
- Unemployment.
- Wages, Compensation and Benefits.
- Youth Unemployment.
- Physical Description:
- 1 online resource (41 pages)
- Place of Publication:
- Washington, D.C. : The World Bank, 2020.
- System Details:
- data file
- Summary:
- This paper uses microsimulation techniques to quantify the potential ex-ante impacts of several minimum wage increases on labor market outcomes in Kosovo. The results show that the overall impacts of a minimum wage increase in the baseline scenario are likely to be modest, although the impacts for some groups may be stronger. In the most extreme scenario, an increase to 250 euros per month, the simulated unemployment rate increases by 0.4 percentage point in the short term and about 0.6 percentage point in the long term. The youth unemployment rate (ages 15-24) is anticipated to increase by up to 1.1 percentage points in this scenario, a relatively large increase considering the already high levels of unemployment among this group. Similarly, unemployment among the unskilled (with primary school or less) is simulated to increase by 0.6 percentage point in the short term and up to 0.8 percentage point in the long term. The paper finds that, even if raising the minimum wage is long overdue, due to decreasing nominal wages in real terms, policy needs to strike a fine balance between protecting workers and ensuring that employment effects are not too large.
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