Minimum wage and local employment: A spatial panel approach

This study analyzes spatial dependencies in the relationship between employment and minimum wage. Local may be affected not only by changes relative wage a region but also those neighboring regions. We use Durbin model data for 380 local Polish labor markets during 2006–2018. The results reveal significant heterogeneities model, showing minimum-to-average-wage ratio effects, insignificant at beginning of analyzed period, become negative. These observed without framework are important minimum-wage policymakers. Our suggest that, countries with strong differences average level regions, can differentiated market to avoid large ratio.