Minimum Wages and Employment
AbstractWe review the burgeoning literature on the employment effects of minimum wages – in the United States and in other countries – that was spurred by the new minimum wage research beginning in the early 1990s. Our review indicates that there is a wide range of existing estimates and, accordingly, a lack of consensus about the overall effects on low-wage employment of an increase in the minimum wage. However, the oft-stated assertion that recent research fails to support the conclusion that the minimum wage reduces employment of low-skilled workers is clearly incorrect. A sizable majority of the studies surveyed in this monograph give a relatively consistent (although not always statistically significant) indication of negative employment effects of minimum wages. In addition, among the papers we view as providing the most credible evidence, almost all point to negative employment effects, both for the United States as well as for many other countries. Two other important conclusions emerge from our review. First, we see very few – if any – studies that provide convincing evidence of positive employment effects of minimum wages, especially from those studies that focus on the broader groups (rather than a narrow industry) for which the competitive model generally predicts disemployment effects. Second, the studies that focus on the least-skilled groups that are likely most directly affected by minimum wage increases provide relatively overwhelming evidence of stronger disemployment effects for these groups.
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Bibliographic InfoArticle provided by now publishers in its journal Foundations and Trends(R) in Microeconomics.
Volume (Year): 3 (2007)
Issue (Month): 1–2 (March)
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Web page: http://www.nowpublishers.com/
Employment; Minimum wage; Labor policy;
Other versions of this item:
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- The Chigley politics of the living wage
by chris dillow in Stumbling and Mumbling on 2012-11-05 14:40:27
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