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The productivity enhancing Impacts of the Minimum Wage: Lessons from Denmark, New Zealand and Ireland

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  • Colm McLaughlin

Abstract

There has been increasing interest of late in the question of whether minimum wage regulations can raise productivity through the 'shock effect'. This paper explores this question in comparative perspective, by examining the impact of minimum wage regulations and institutions in Denmark, New Zealand and Ireland. It argues that while they are important, a supportive institutional framework plays a far more crucial role in providing coordinated solutions to issues of market failure, such as inadequate levels of training. The paper suggests that sectoral bargaining institutions in low-paid sectors may have the potential to facilitate such coordination and enable the high-productivity model to emerge. For the UK context, this raises the question as to whether Wages Councils in a modernised form might have some future role to play.

Suggested Citation

  • Colm McLaughlin, 2007. "The productivity enhancing Impacts of the Minimum Wage: Lessons from Denmark, New Zealand and Ireland," Working Papers wp342, Centre for Business Research, University of Cambridge.
    • Handle: RePEc:cbr:cbrwps:wp342
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    File URL: https://www.jbs.cam.ac.uk/cbrwp342/
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    References listed on IDEAS

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    Cited by:

    1. World Bank, 2013. "Minimum Wage Policy : Lessons with a Focus on the ASEAN Region," World Bank Publications - Reports 16687, The World Bank Group.

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    More about this item

    Keywords

    National Minimum Wage; Low pay; Training; Productivity; Labour market coordination; Comparative employment relations.;
    All these keywords.

    JEL classification:

    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy
    • J80 - Labor and Demographic Economics - - Labor Standards - - - General
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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