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Minimum wages: possible effects on the distribution of income

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Author Info
Amanda Gosling () (Institute for Fiscal Studies and University of Essex)

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Abstract

Since the 1980s, there has been increased interest among unions and two opposition parties in the possibility of introducing a national minimum wage (NMW). The central argument for a minimum wage is a social justice one: a minimum wage is deemed necessary to prevent some employers exploiting workers with little bargaining power by paying them less than the value of the goods and services they produce. The aim of this paper is to establish what sort of people might be affected by a minimum wage, how this might have changed over time and how far a minimum wage can be used as a tool to redistribute income from the rich to the poor. No attempt is made to simulate the effect of a NMW on employment and prices, and obviously any complete analysis needs to take these effects into account. Recent research (see the discussion below) on this issue, however, indicates little evidence that a `moderate\\\' minimum will have any effect on employment and it is thus likely that the ‘first-round effects\\\' described in this paper are informative.

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Publisher Info
Article provided by Institute for Fiscal Studies in its journal Fiscal Studies.

Volume (Year): 17 (1996)
Issue (Month): 4 (November)
Pages: 31-48
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Handle: RePEc:ifs:fistud:v:17:y:1996:i:4:p:31-48

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Brown, Charles & Gilroy, Curtis & Kohen, Andrew, 1982. "The Effect of the Minimum Wage on Employment and Unemployment," Journal of Economic Literature, American Economic Association, vol. 20(2), pages 487-528, June. [Downloadable!] (restricted)
  2. Susan Harkness, 1996. "The gender earnings gap: evidence from the UK," Fiscal Studies, Institute for Fiscal Studies, vol. 17(2), pages 1-36, May. [Downloadable!]
  3. Stephen Machin & Alan Manning, 1994. "The effects of minimum wages on wage dispersion and employment: Evidence from the U.K. Wages Councils," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 47(2), pages 319-329, January.
  4. McClements, L. D., 1977. "Equivalence scales for children," Journal of Public Economics, Elsevier, vol. 8(2), pages 191-210, October. [Downloadable!] (restricted)
  5. Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-93, September. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Stefano Scarpetta, 1998. "Reformas laborales de mercado y desempleo: enseñanzas de la experiencia de los países de la OCDE," RES Working Papers 4137, Inter-American Development Bank, Research Department. [Downloadable!]
  2. Kai-Uwe Müller & Viktor Steiner, 2008. "Would a Legal Minimum Wage Reduce Poverty?: A Microsimulation Study for Germany," Discussion Papers of DIW Berlin 791, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  3. Stefano Scarpetta, 1998. "Labor Market Reforms and Unemployment: Lessons from the Experience of the OECD Countries," RES Working Papers 4136, Inter-American Development Bank, Research Department. [Downloadable!]
  4. David Metcalf, 1999. "The British National Minimum Wage," CEP Discussion Papers dp0419, Centre for Economic Performance, LSE. [Downloadable!]
  5. Pio Baake & Vanessa von Schlippenbach, 2008. "Upfront Payments and Listing Decisions," Discussion Papers of DIW Berlin 793, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  6. Holly Sutherland, 1997. "Women, men and the redistribution of Income," Fiscal Studies, Institute for Fiscal Studies, vol. 18(1), pages 1-22, February. [Downloadable!]
  7. Müller, Kai-Uwe & Steiner, Viktor, 2008. "Would a Legal Minimum Wage Reduce Poverty? A Microsimulation Study for Germany," IZA Discussion Papers 3491, Institute for the Study of Labor (IZA). [Downloadable!]
  8. Sutherland, H., 2001. "The National Minimum Wage and In-work Poverty," Cambridge Working Papers in Economics 0111, Faculty of Economics, University of Cambridge. [Downloadable!]
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