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A Survey Of The Effects Of The Minimum Wage On Prices

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  • Sara Lemos

Abstract

It is well established in the literature that minimum wage increases compress the wage distribution. Firms respond to these higher labour costs by reducing employment, reducing profits, or raising prices. While there are hundreds of studies on the employment effect of the minimum wage, there are merely a handful of studies on its profit effects, and only a couple of dozen studies on its price effects. Furthermore, a comprehensive survey on minimum wage price effects is not available in the literature. Given the policy relevance of this neglected issue, in this paper we summarize and critically compare the available evidence on the effects of minimum wages on prices. Copyright 2008 The Author Journal compilation © 2008 Blackwell Publishing Ltd.

Suggested Citation

  • Sara Lemos, 2008. "A Survey Of The Effects Of The Minimum Wage On Prices," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 187-212, February.
  • Handle: RePEc:bla:jecsur:v:22:y:2008:i:1:p:187-212
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    Cited by:

    1. Jonathan Wadsworth, 2010. "Did the National Minimum Wage Affect UK Prices?," Fiscal Studies, Institute for Fiscal Studies, vol. 31(1), pages 81-120, March.
    2. Brian Bell & Stephen Machin, 2018. "Minimum Wages and Firm Value," Journal of Labor Economics, University of Chicago Press, vol. 36(1), pages 159-195.
    3. repec:eee:labeco:v:47:y:2017:i:c:p:163-181 is not listed on IDEAS
    4. Katalin Bodnár & Ludmila Fadejeva & Stefania Iordache & Liina Malk & Desislava Paskaleva & Jurga Pesliakaite & Nataša Todorovic Jemec & Peter Tóth & Robert Wyszynski, 2017. "How do firms adjust to rises in the minimum wage? Survey evidence from Central and Eastern Europe," Working and Discussion Papers WP 9/2017, Research Department, National Bank of Slovakia.
    5. Egeln, Jürgen & Gottschalk, Sandra & Gürtzgen, Nicole & Niefert, Michaela & Rammer, Christian & Sprietsma, Maresa & Schröder, Helmut & Schütz, Holger & Frei, Corinna & Reich, Patrick Simon & Vossemer,, 2011. "Evaluation bestehender gesetzlicher Mindestlohnregelungen - Branche: Abfallwirtschaft (Aktenzeichen: Zb 1-04812-3/10f)," ZEW Expertises, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research, number 110536, June.
    6. Tonin, Mirco, 2011. "Minimum wage and tax evasion: Theory and evidence," Journal of Public Economics, Elsevier, vol. 95(11), pages 1635-1651.
    7. Emek Basker & Muhammad Taimur Khan, 2016. "Does the Minimum Wage Bite into Fast-Food Prices?," Journal of Labor Research, Springer, vol. 37(2), pages 129-148, June.
    8. Mirko Draca & Stephen Machin & John Van Reenen, 2011. "Minimum Wages and Firm Profitability," American Economic Journal: Applied Economics, American Economic Association, vol. 3(1), pages 129-151, January.
    9. repec:spr:ijlaec:v:60:y:2017:i:1:d:10.1007_s41027-017-0077-0 is not listed on IDEAS
    10. Megan Linde Leonard & T. D. Stanley & Hristos Doucouliagos, 2014. "Does the UK Minimum Wage Reduce Employment? A Meta-Regression Analysis," British Journal of Industrial Relations, London School of Economics, vol. 52(3), pages 499-520, September.
    11. Luis Eduardo Arango & Luz Karine Ardila & Miguel Ignacio Gömez, 2010. "Efecto del cambio del salario mínimo en el precio de las comidas fuera del hogar en Colombia," Borradores de Economia 584, Banco de la Republica de Colombia.
    12. John Schmitt, 2013. "Why Does the Minimum Wage Have No Discernible Effect on Employment?," CEPR Reports and Issue Briefs 2013-04, Center for Economic and Policy Research (CEPR).
    13. Margherita Comola & Luiz de Mello, 2009. "How Does Decentralised Minimum-Wage Setting Affect Unemployment and Informality?: The Case of Indonesia," OECD Economics Department Working Papers 710, OECD Publishing.

    More about this item

    JEL classification:

    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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