On the Empirics of Minimum Wages and Employment: Stylized Facts for The Austrian Industry

Abstract

We ask for the empirical evidence of the textbook theory of minimum wages for the Austrian Industry. The bargaining result of unions and firms is interpreted as a minimum wage, as the bargaining situation in Austria may be described best by a "right to manage-model". Based on the analysis of micro-founded "employment functions" in contrast to the predictions of the textbook analysis no significant negative effect of minimum wages on employment is found.Minimum Wages; Employment; Austrian Industry