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A review of the consequences of the Indian minimum wage on Indian wages and employment

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  • Wolfson, Paul J.

Abstract

This paper reviews the literature that relates minimum wages in India to wage and employment outcomes. The entire empirical literature on the Indian minimum wage is not large, and the segment focused on wages and employment comprises only a few analyses. It reports that minimum wages result in higher wages. However, this occurs not near the bottom of the wage distribution, as would be expected from a wage floor, but near the middle of the distribution. This suggests a lighthouse effect; a minimum wage that is aspirational, acting as a benchmark to which various wages are compared, rather than a floor. The only statistically significant, negative effect on employment that is reported is for child labour. Other estimates are either not statistically significant or are positive.

Suggested Citation

  • Wolfson, Paul J., 2019. "A review of the consequences of the Indian minimum wage on Indian wages and employment," ILO Working Papers 995041591702676, International Labour Organization.
    • Handle: RePEc:ilo:ilowps:995041591702676
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    Cited by:

    1. Mohit Sharma & Brinda Viswanathan, 2022. "Minimum Wages in the Presence of Wage and Non-Wage Sectors in India: An Exploratory Analysis of the Non-Farm Sector," Working Papers 2022-225, Madras School of Economics,Chennai,India.

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    Keywords

    minimum wage.; employment.; statistical analysis.;
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