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Employment Effects of Minimum Wages: Evidence from a Quasi‐Experiment

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  • Andrew Leigh

Abstract

To estimate the impact of raising the minimum wage on employment, this article uses a natural experiment, arising from six increases in the Western Australian statutory minimum wage during the period 1994–2001. Relative to the rest of Australia, the employment to population ratio in Western Australia fell following each of the six rises, twice by a statistically significant margin. Aggregating the increases, the elasticity of labour demand with respect to the Western Australian statutory minimum wage is found to be −0.13.

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  • Andrew Leigh, 2003. "Employment Effects of Minimum Wages: Evidence from a Quasi‐Experiment," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 36(4), pages 361-373, December.
    • Handle: RePEc:bla:ausecr:v:36:y:2003:i:4:p:361-373
    DOI: 10.1111/j.1467-8462.2003.00295.x
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    Cited by:

    1. David Neumark & William Wascher, 2006. "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research," Working Papers 060708, University of California-Irvine, Department of Economics, revised Jan 2007.
    2. Bose, Udichibarna & MacDonald, Ronald & Tsoukas, Serafeim, 2019. "Policy initiatives and firms' access to external finance: Evidence from a panel of emerging Asian economies," Journal of Corporate Finance, Elsevier, vol. 59(C), pages 162-184.
    3. PN (Raja) Junankar, 2015. "The impact of the Global Financial Crisis on youth unemployment," The Economic and Labour Relations Review, , vol. 26(2), pages 191-217, June.
    4. Bose, Udichibarna & MacDonald, Ronald & Tsoukas, Serafeim, 2015. "Policy initiatives and firms' access to external finance: Evidence from a panel of emerging Asian economies," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 2015-65, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Andrew Leigh, 2007. "Does Raising the Minimum Wage Help the Poor?," The Economic Record, The Economic Society of Australia, vol. 83(263), pages 432-445, December.
    6. Junankar, Pramod N. (Raja), 2014. "The Impact of the Global Financial Crisis on Youth Labour Markets," IZA Discussion Papers 8400, Institute of Labor Economics (IZA).
    7. James Bishop, 2018. "The Effect of Minimum Wage Increases on Wages, Hours Worked and Job Loss," RBA Research Discussion Papers rdp2018-06, Reserve Bank of Australia.
    8. Mark Wooden, 2006. "Implications of Work Choices Legislation," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 13(2), pages 99-116.
    9. Jeff Borland & Yi-Ping Tseng & Roger Wilkins, 2005. "Experimental and Quasi-Experimental Methods of Microeconomic Program and Policy Evaluation," Melbourne Institute Working Paper Series wp2005n08, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    10. Wang‐Sheng Lee & Sandy Suardi, 2011. "Minimum Wages and Employment: Reconsidering the Use of a Time Series Approach as an Evaluation Tool," British Journal of Industrial Relations, London School of Economics, vol. 49(Supplemen), pages 376-401, July.
    11. Jeffrey P. Thompson, 2009. "Using Local Labor Market Data to Re-Examine the Employment Effects of the Minimum Wage," ILR Review, Cornell University, ILR School, vol. 62(3), pages 343-366, April.
    12. Philip Lewis, 2008. "The First Two Decisions of the Australian Fair Pay Commission: A Critique," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 15(2), pages 45-64.
    13. Roula Inglesi-Lotz & Anastassios Pouris, 2011. "Scientometric impact assessment of a research policy instrument: the case of rating researchers on scientific outputs in South Africa," Scientometrics, Springer;Akadémiai Kiadó, vol. 88(3), pages 747-760, September.

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