Social and fiscal impacts of statutory minimum wages in EU countries: a microsimulation analysis with EUROMOD

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Labor supply elasticities and average working hours

Country	Labor supply elasticity	Average working hours of MW earners	Average working hours of non–MW earners
Belgium	0.048	31.4	36.8
Bulgaria	0.041	38.2	40.4
Czechia	0.045	37.7	40.9
Germany	0.123	29.8	37.9
Estonia	0.031	37.5	40.1
Greece	0.025	35.5	39.9
Spain	0.052	30.2	38.3
France	0.083	32.9	37.3
Croatia	0.005	39.0	40.7
Hungary	0.023	39.9	39.7
Ireland	0.092	30.5	34.3
Lithuania	0.048	37.4	39.6
Luxembourg	0.041	36.8	39.7
Latvia	0.037	38.0	40.2
Malta	0.056	31.3	39.6
Netherlands	0.046	28.2	33.3
Poland	0.025	37.2	41.0
Portugal	0.069	37.2	40.3
Romania	0.011	40.8	41.0
Slovenia	0.036	37.5	40.1
Slovakia	0.023	39.0	39.7

A summary of results at the EU level

	Median wage			Average wage
	50% of median wage	55% of median wage	60% of median wage	40% of average wage	45% of average wage	50% of average wage
Countries affected (of the 21 with a statutory national MW)	9 MS: CZ, DE, EE, EL, HR, IE, LV, MT, NL	15 MS: all but BG, ES, FR, PT, RO, SI	19 MS: all but PT and BG	6 MS: CZ, EE, HU, IE, LV, MT	17 MS: all but ES, FR, PT, SI	20 MS: all but PT
Number of workers affected	5 million	11 million	22 million	0.7 million	12 million	24 million
Increase in the EU wage bill (%)	0.2	0.4	1.0	0.01	0.4	1.0
Impact on wage inequality (%)	−2	−5	−8	−1	−6	−10
Impact on in-work poverty (%)	−2	−6	−12	−1	−7	−13
Gender pay gap (%)	−0.7	−2	−5	−0.2	−2	−5
Impact on total employment (%)	−0.1	−0.2	−0.4	−0.01	−0.2	−0.5
Impact on labor supply (hours offered) (%)	0.00	0.07	0.15	0.05	0.09	0.17

Median number of hours worked by full-time employees

Country	Median working hours
BE	38
FR	38
IE	39
All other 18 EU Member States with SMWs	40

SMWs in the various scenarios

Countries	Statutory MW	Hypothetical MW as a ratio of
		Median wage			Average wage
		50%	55%	60%	40%	45%	50%
Belgium	1,594	1,584	1,742	1,900	1,434	1,613	1,792
Bulgaria	286	239	262	286	266	299	332
Czechia	519	580	638	695	545	613	681
Germany	1,557	1,680	1,848	2,016	1,537	1,729	1,921
Estonia	540	636	699	763	601	676	751
Greece	758	761	837	914	695	782	869
Spain	1,050	952	1,047	1,142	893	1,005	1,116
France	1,521	1,288	1,417	1,546	1,243	1,399	1,554
Croatia	506	510	561	611	478	538	598
Hungary	464	451	496	541	469	528	586
Ireland	1,656	1,886	2,074	2,263	1,757	1,977	2,196
Lithuania	555	538	591	645	532	598	665
Luxembourg	2,071	1,919	2,110	2,302	1,888	2,124	2,360
Latvia	430	470	517	564	470	529	588
Malta	762	871	958	1,045	798	898	997
Netherlands	1,616	1,662	1,828	1,994	1,545	1,738	1,931
Poland	523	505	555	606	506	570	633
Portugal	700	499	549	599	561	631	701
Romania	446	402	443	483	440	495	551
Slovenia	887	771	848	925	748	842	935
Slovakia	520	515	566	618	498	560	622

Difference in growth between SMWs and average wages from 2016 to 2019

Country	(A) Nominal growth of SMW 2016–2019 (%)	(B) Average nominal wage growth 2016–2019 (%)	Difference between (A) and (B) (%)
Belgium	4	7	−3
Bulgaria	33	28	5
Czechia	44	24	20
Germany	8	9	−1
Estonia	26	22	4
Greece	11	4	7
Spain	37	3	34
France	4	10	−6
Croatia	22	14	8
Hungary	32	43	−12
Ireland	7	10	−3
Lithuania	46	66	−20
Luxembourg	9	8	1
Latvia	16	26	−10
Malta	5	12	−7
Netherlands	6	5	2
Poland	27	19	8
Portugal	13	8	6
Romania	59	79	−20
Slovenia	12	9	3
Slovakia	28	18	10