Labor market

How does the growth of the minimum wage impact on employment in Bulgaria?

2015

On the basis of the presented econometric model, we can predict the numerical effect that the planned hike of the minimum wage to 450 lv.  in 2017 will have on employment amongst the least-educated. If the minimum wage rises from 340 lv. in 2013 (the last year of the analysed period) to 450 lv. in 2017, we can expect the employment rate among those with primary and lower education to decline by 1,54 percentage points. So, if the employment rate for people aged between 15 and 64 years and having primary or lower education was 17,5% in 2013, the planned hike of the legally binding minimum wage can lead to a decline in the employment rate of this group below 16% in 2017 (all else being equal). If we assume that the size of the workforce with primary or lower education remains the same between 2013 and 2017, this decline in employment means a loss of 26 272 jobs.