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Do minimum wage increases cause inflation? evidence from vietnam

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  • Cuong Nguyen

    ()
    (Indochina Research & Consulting)

Abstract

It is often argued that minimum wage increases can lead to increased inflation. This paper examines the impact of minimum wage increases on inflation in Vietnam during the 1994-2008 period. Inflation is measured by a monthly overall Consumer Price Index (CPI) and a monthly food CPI. It is found that the minimum wage increases did not increase inflation. Since the minimum wage increases often took place one or two months before the Vietnamese New Year festivals, observed increases in monthly inflation after the minimum wage increases were caused by increased consumption demand during the New Year festivals, not by the minimum wage increases.

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File URL: http://www.accessecon.com/pubs/EB/2012/Volume32/EB-12-V32-I1-A9.pdf
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Bibliographic Info

Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 32 (2012)
Issue (Month): 1 ()
Pages: A9

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Handle: RePEc:ebl:ecbull:eb-12-00114

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Keywords: Minimum wages; inflation; CPI; Vietnam.;

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  1. Lawrence Katz & Alan Krueger, 1992. "The Effect of the Minimum Wage on the Fast Food Industry," Working Papers, Princeton University, Department of Economics, Industrial Relations Section. 678, Princeton University, Department of Economics, Industrial Relations Section..
  2. James M. MacDonald & Daniel Aaronson, 2000. "How do retail prices react to minimum wage increases?," Working Paper Series, Federal Reserve Bank of Chicago WP-00-20, Federal Reserve Bank of Chicago.
  3. Nguyen Viet, Cuong, 2010. "The Impact of a Minimum Wage Increase on Employment, Wages and Expenditures of Low-Wage Workers in Vietnam," MPRA Paper 36751, University Library of Munich, Germany, revised 15 Aug 2011.
  4. Sara lemos, 2004. "The Effect of the Minimum Wage on Prices," Discussion Papers in Economics, Department of Economics, University of Leicester 04/7, Department of Economics, University of Leicester.
  5. Daniel Aaronson, 2001. "Price Pass-Through And The Minimum Wage," The Review of Economics and Statistics, MIT Press, vol. 83(1), pages 158-169, February.
  6. Jon Frye & Robert J. Gordon, 1980. "Government Intervention in the Inflation Process: The Econometrics of "Self-Inflicted Wounds"," NBER Working Papers 0550, National Bureau of Economic Research, Inc.
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Cited by:
  1. World Bank, 2013. "Minimum Wage Policy : Lessons with a Focus on the ASEAN Region," World Bank Other Operational Studies 16687, The World Bank.
  2. Nguyen Viet Cuong, 2014. "Do Minimum Wages Affect Firms’ Labor and Capital? Evidence from Vietnam," Working Papers, Department of Research, Ipag Business School 2014-179, Department of Research, Ipag Business School.

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