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Theoretical and Applied Economics
No. 2 / 2015 (603), Summer

Minimum wage – labour market rigidity factor

Andreea Claudia ȘERBAN
Bucharest University of Economic Studies, Romania
Mirela Ionela ACELEANU
Bucharest University of Economic Studies, Romania

Abstract. 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.

Keywords: minimum wage, labour market rigidity, employment, labour productivity, social inequalities.

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