The effects of minimum wage on a labour market with high temporary employment

In this paper, we use propensity score matching and a difference-in-differences estimator to study the impact of minimum wage hikes on labour market outcomes in Poland in 2002-2013. We focus on job separations, adjustments of hours worked, share of full-time jobs and of real wages. We distinguish between permanent and temporary jobs and also study flows between these types of jobs in the context of rising incidence of temporary employment in Poland. Our findings show that the minimum wage increases in Poland were not only associated with higher wages and better working time standards for workers who retained their jobs, but also more job separations, especially among temporary workers, and higher flows from permanent to temporary jobs. After the policy shift in 2008, the number of separations attributed to the minimum wage hikes rose and in 2008- 2013 amounted to 1% of the total employment of people aged 15-54. Women with temporary jobs constituted more than 50% of workers suffering from these separations.