Impact of Minimum Wage in V4 Countries
Impact of Minimum Wage in V4 Countries

Summary/Abstract: The labour market is one of the most regulated markets. Two approaches to labour market regulation are usually described in economic literature. One approach sees regulation as a necessity for the social protection of labour and as a tool leading to productivity growth (institutionalists). The other one (distortionist) considers regulation as an impediment to the adjustment mechanism of the labour market. The aim of this paper is to present different views on the minimum wage institution in economic theories. The main objective is however to verify three hypotheses in V4 countries which confirmation or refutation are verified by simple regression analysis. Results of the analysis confirm that an increase in minimum wage causes an increase in employment rate and unemployment rate, but only for Poland. The third hypothesis (an increase in minimum wage causes an increase in GDP) is refuted for all V4 countries.

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