@TechReport{iza:izadps:dp8419, author={Garnero, Andrea and Kampelmann, Stephan and Rycx, François}, title={Minimum Wage Systems and Earnings Inequalities: Does Institutional Diversity Matter?}, year={2014}, month={Aug}, institution={Institute of Labor Economics (IZA)}, address={Bonn}, type={IZA Discussion Paper}, number={8419}, url={https://www.iza.org/publications/dp8419}, abstract={This paper explores how the diversity of minimum wage systems affects earnings inequalities within European countries. It relies on the combination of (a) harmonized micro-data from household surveys, (b) data on national statutory minimum wages and coverage rates, and (c) hand-collected information on minimum rates from more than 1,100 sectoral-level agreements across Europe. The analysis covers 18 countries over the period 2007-2009. Empirical results confirm the intuition of many practitioners that the combination of sectoral minimum rates and high coverage of collective bargaining can, at least for earnings inequalities, be regarded as a functional equivalent to a binding statutory minimum wage at the national level. Regression results suggest indeed that both a national statutory minimum wage and, in countries with sectoral-level minima, a higher collective bargaining coverage are significantly associated with lower levels of (overall and inter-industry) wage inequalities and a smaller fraction of workers paid below prevailing minima. Several robustness checks confirm these findings.}, keywords={wage inequality;collective bargaining;minimum wage systems;Europe}, }