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A Survey of the Effects of the Minimum Wage on Prices

  • Sara Lemos

    ()

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 summarise and critically compare the available evidence on the effects of minimum wages on prices.

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File URL: http://www.le.ac.uk/economics/research/RePEc/lec/leecon/dp06-9.pdf
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Paper provided by Department of Economics, University of Leicester in its series Discussion Papers in Economics with number 06/9.

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Date of creation: May 2006
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Handle: RePEc:lec:leecon:06/9
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