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For how long can a worker be trapped on the minimum wage? An analysis of Portuguese labour market.
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To analyse the factors that influence how long a worker would be trapped on minimum wage in Portugal, a survival and a hazard rate analysis were applied. The results indicate that the worker experience a short duration and that a negative duration dependence exists. Minimum wage continues to affect more women, with a lower school level. The estimates indicate that those who belong to the manufacturing sector and to a district with a higher Kaitz index, experience a smaller hazard rate. The destinations of exit demonstrated that hazard rate is larger to those who change of firm.
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Minimum wage Duration Survival analysis Hazard rate