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Addison, John T. & Orgul Demet Ozturk (2012): Minimum wages, labor market institutions, and female employment. A cross-country analysis. In: ILR review, Jg. 65, H. 4, S. 779-809. DOI:10.1177/001979391206500402

Abstract

"The authors investigate the employment consequences of minimum wage regulation for women in 16 OECD countries during 1970 to 2008. The treatment follows that of Neumark and Wascher's (2004) cross-country study using panel methods to estimate minimum wage effects among teenagers and young adults, although they focus on prime-age females -- a group often neglected in the minimum wage literature. Moreover, their analysis covers a longer time interval and deploys time-varying policy and institutional regressors. They report average effects consistent with minimum wages causing material employment losses among the target group and, less conclusively, elevated joblessness as well. Their cross-country findings agree with Neumark and Wascher on the role of some individual labor market institutions and policies, but the authors do not observe the same patterns in the institutional data: specifically, prime-age females do not exhibit stronger employment losses in countries with the least regulated markets." (Author's abstract, IAB-Doku) ((en))

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Addison, John T., McKinley L. Blackburn & Chad D. Cotti (2012): The effect of minimum wages on labour market outcomes. County-level estimates from the restaurant-and-bar sector. In: BJIR, Jg. 50, H. 3, S. 412-435. DOI:10.1111/j.1467-8543.2010.00819.x

Abstract

"We use US county-level data on employment and earnings in the restaurant-and-bar sector to evaluate the impact of minimum-wage changes in low-wage labour markets. Our estimated models are consistent with a simple competitive model in which supply-and-demand factors affect both the equilibrium outcome and the probability of the minimum wage being binding. Our evidence does not suggest that minimum wages reduce employment once controls for trends in county-level sectoral employment are incorporated. Rather, employment appears to exhibit an independent downward trend in states that have increased their minimum wages relative to states that have not, thereby predisposing estimates towards reporting negative outcomes." (Author's abstract, IAB-Doku) ((en))

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Anagnostopoulos, Achilleas & W. Stanley Siebert (2012): The impact of Greek labour market regulation on temporary and family employment. Evidence from a new survey. (IZA discussion paper 6504), Bonn, 24 S.

Abstract

"This paper uses an original dataset for 206 workplaces in Thessaly (Greece), to study consequences of Greece's employment protection law (EPL) and national wage minimum for temporary employment. We find higher temporary employment rates especially among a 'grey' market group of workplaces that pay low wages and avoid the national wage minimum. A similar factor boosts family employment. We also find that EPL 'matters', in particular, managers who prefer temporary contracts because temps are less protected definitely employ more temps. We discuss whether temporary and family work is a form of escape from regulation for less prosperous firms." (Author's abstract, IAB-Doku) ((en))

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Ananian, Sévane & Oana Calavrezo (2012): Les trajectoires salariales des individus payés au voisinage du Smic dans le secteur privé. Une analyse empirique sur données françaises entre 1995 et 2007. In: Economie et Statistique H. 448/449, S. 49-78.

Abstract

"Stellen die Zeiträume, in denen der gesetzliche Mindestlohn (SMIC) bezogen wird, einen vorübergehenden Zustand dar, der sich auf höhere Löhne hinbewegt, oder reihen sie sich in eine Laufbahn anhaltender Einkommensschwachheit ein? Um Ansätze zur Beantwortung dieser Frage zu erhalten, wurden die Entwicklung von Personen, die 1995-2003 in etwa den gesetzlichen Mindeststundenlohn bezogen, über einen Zeitraum von 5 Jahren verfolgt. Es war dabei nötig, eine Methode zu entwickeln, um diese Personen zweifelsfrei zu bestimmen, da während der Umsetzung der Politik der Verringerung der Arbeitszeit in der ersten Hälfte des Jahres 2000 verschiedene Mindestlohnstufen nebeneinanderher bestanden haben. Die Personen wurden anschließend in sechs Hauptkategorien der Gehaltsentwicklung aufgegliedert. Die Profile der Arbeitnehmer, die von den einzelnen Gruppen umfasst werden, weisen dabei starke individuelle Unterschiede auf. Die Arbeitnehmer, deren Gehälter sich nach oben entwickelt haben, bilden die zahlenstärkste Gruppe. Sie sind meist schon eine gewisse Zeit im Unternehmen bzw. auf dem Arbeitsmarkt. Die zahlenmäßig geringste Gruppe umfasst diejenigen Arbeitnehmer, deren Lohn über die fünf untersuchten Jahre hin in etwa auf Höhe des gesetzlichen Mindestlohns stehen blieb. Es handelt sich dabei oft um Frauen, Arbeiter und Arbeitnehmer oder Personen, die schon länger auf dem Arbeitsmarkt sind. Zwischen diesen beiden Kategorien bewegen sich Personen, deren Gehaltskurve unregelmäßiger ist, oder die aus dem Analysebereich herausfallen. Bei Arbeitnehmern, die sich zwischen Löhnen, die sich in etwa auf der Höhe des gesetzlichen Mindestlohns befinden, und Bereichen jenseits der Analyse hin und her bewegen, gegebenenfalls mit vorübergehenden Zeiträumen höheren Einkommens, handelt es sich oft um junge Menschen mit weniger Erfahrung im Beruf oder auf dem Arbeitsmarkt. Arbeitnehmer, die aus dem Bereich herausfallen, ohne höhere Löhne bezogen zu haben, sind oft älter. Es handelt sich dabei wahrscheinlich um Rentenabgänge am Ende des Arbeitslebens." (Autorenreferat, IAB-Doku)

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Azar, Ofer H. (2012): The effect of the minimum wage for tipped workers on firm strategy, employees and social welfare. In: Labour economics, Jg. 19, H. 5, S. 748-755. DOI:10.1016/j.labeco.2012.07.002

Abstract

"Millions of workers derive much of their income from tips and are subject to the 'tipped minimum wage' that differs from the regular minimum wage. This article examines the implications of the tipped minimum wage and shows that increasing it may lead restaurants to adopt a compulsory service charge in lieu of tipping to extract the economic rent enjoyed by waiters under tipping. Because servers are better off with tipping, this implies that increasing the tipped minimum wage in an attempt to increase servers' income may achieve the opposite result. Moreover, increasing the tipped minimum wage may reduce social welfare." (Author's abstract, IAB-Doku) ((en))

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Belser, Patrick & Kristen Sobeck (2012): At what level should countries set their minimum wages? In: Labour education, Jg. 4, H. 1, S. 105-127.

Abstract

"This paper has reviewed some fundamental elements of minimum wage setting and proposed a discussion on some of the indicators which can be used to set a first-time minimum wage or to evaluate whether an existing legal floor is set at the 'right' level. The use of such indicators is a practical way to choose a minimum wage rate that brings real benefits to low-paid workers, while at the same time remaining consistent with the objectives of a competitive economy. Once these indicators are calculated, it is of course up to the governments, and the social partners, to define their respective positions with a view to convincing a majority of those who hold the final decision-making power. But by using these indicators, decision-makers at least have some basic information" (Text excerpt, IAB-Doku) ((en))

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Bildirici, Melike E. & Elçin Aykaç Alp (2012): Minimum wage is efficient wage in Turkish labor market. TAR-cointegration analysis. In: Quality and Quantity. International Journal of Methodology, Jg. 46, H. 4, S. 1261-1270. DOI:10.1007/s11135-011-9439-8

Abstract

"This study has two main purposes. First one is the necessity of taking minimum wages into account, if there is a purpose to analyze the relationship between wages and productivity in an economy which has high unemployment rates and informal employment. Second one is about the analyzing method of this relationship. We choose TAR cointegration analysis for this relation. First step of this analysis is testing for stationarity of the variables. However the low power of traditional unit root tests is examined and proved in many studies but not taken into account in TAR cointegration studies in literature. This study shows that traditional unit root tests are unfavorable for the variables which have TAR structures. Because of this shortcoming of traditional unit root tests, these results must be supported with TAR unit root tests." (Author's abstract, IAB-Doku) ((en))

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Boeri, Tito (2012): Setting the minimum wage. In: Labour economics, Jg. 19, H. 3, S. 281-290. DOI:10.1016/j.labeco.2012.01.001

Abstract

"The process leading to the setting of the minimum wage so far has been overlooked by economists. There are two common ways of setting national minimum wages: they are either government legislated or the byproduct of collective bargaining agreements, which are extended erga omnes to all workers. We develop a simple model relating the level of the minimum wage to the setting regime. Next, we exploit a new data set on minimum wages in 68 countries having a statutory national minimum level of pay in the period 1981-2005. We find that a Government legislated minimum wage is lower than a wage floor set within collective agreements. This effect survives to several robustness checks and can be interpreted as a causal effect of the setting regime on the level of the minimum wage." (Author's abstract, IAB-Doku) ((en))

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Bosch, Gerhard & Claudia Weinkopf (2012): Mindestlöhne, Tariflöhne und Lohnungleichheit. In: R. Bispinck, G. Bosch, K. Hofemann & G. Naegele (Hrsg.) (2012): Sozialpolitik und Sozialstaat : Festschrift für Gerhard Bäcker, S. 221-238. DOI:10.1007/978-3-531-19024-2_14

Abstract

"Seit Mitte der 1990er Jahre ist in Deutschland der Anteil der gering Bezahlten an allen Beschäftigten von einstmals 13 bis 14 Prozent auf 21,4 Prozent im Jahre 2009 angestiegen. Bemerkenswert ist dabei nicht allein die im europaweiten Vergleich schnelle Zunahme auf ein überdurchschnittliches Niveau, sondern auch die starke Spreizung der Löhne innerhalb des Niedriglohnsektors. In Deutschland erhielten im Jahr 2008 gut 3,4 Millionen Beschäftigte einen Stundenlohn unter sieben Euro, was in den westlichen Nachbarländern aufgrund der dortigen Mindestlöhne nicht möglich wäre (Kalina/Weinkopf 2010, S. 209)." (Textauszug, IAB-Doku)

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Butcher, Tim (2012): Still evidence-based? The role of policy evaluation in recession and beyond: the case of the National Minimum Wage. In: National Institute Economic Review, Jg. 219, H. 1, S. R26-R40. DOI:10.1177/002795011221900104

Abstract

"This article explains the role of evidence in determining the recommendations made by the Low Pay Commission (LPC) for the National Minimum Wage (NMW). First, it sets out the process of recommending the minimum wage including the role of evidence. Second, it summarises the evidence available on the impact of the minimum wage before discussing how that evidence has informed the recommendations for the adult rate of the minimum wage in the LPC's reports. It concludes by assessing the extent to which the NMW might be regarded as a success and considers whether the recent financial crisis will alter the evidence-based approach so far adopted by the LPC." (Author's abstract, IAB-Doku) ((en))

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Butcher, Tim, Richard Dickens & Alan Manning (2012): Minimum wages and wage inequality. Some theory and an application to the UK. (CEP discussion paper 1177), London, 33 S.

Abstract

"Research suggests that, at the levels set in countries like the US and the UK, minimum wages have little effect on employment but do have impacts on wage inequality. However we lack models that can explain these facts - this paper presents one based on imperfect labour markets. The paper also investigates the impact of the UK's National Minimum Wage on wage inequality finding it can explain a sizeable part of the evolution of wage inequality in the bottom half of the distribution in the period 1998-2010. We also present evidence that the impact of the NMW reaches up to 40% above the NMW in 2010 which corresponds to the 25th percentile. These spillovers are larger in low-wage segments." (Author's abstract, IAB-Doku) ((en))

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Campolieti, Michele, Morley Gunderson & Byron Lee (2012): The (non) impact of minimum wages on poverty. Regression and simulation evidence for Canada. In: Journal of labor research, Jg. 33, H. 3, S. 287-302. DOI:10.1007/s12122-012-9139-8

Abstract

"We estimate the effect of minimum wages on poverty for Canada using data from the Survey of Labour and Income Dynamics (SLID) for 1997 to 2007 and find that minimum wages do not have a statistically significant effect on poverty and this finding is robust across a number of specifications. Our simulation results, based on the March 2008 Labour Force Survey (LFS), find that only about 30 % of the net earnings gain from minimum wage increases goes to the poor while about 70 % 'spill over' into the hands of the non-poor. Furthermore, we find that job losses are disproportionately concentrated on the poor. Our results highlight that, political rhetoric not-withstanding, minimum wages are poorly targeted as an anti-poverty device and are at best an exceedingly blunt instrument for dealing with poverty." (Author's abstract, IAB-Doku) ((en))

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Cette, Gilbert, Valérie Chouard & Gregory Verdugo (2012): Les effets des hausses du Smic sur le salaire moyen. In: Economie et Statistique H. 448/449, S. 3-28.

Abstract

"Diese Studie ist den Auswirkungen von Erhöhungen des gesetzlichen Mindestlohns auf das Durchschnittsgehalt gewidmet. Es werden zwei Indikatoren des Durchschnittsgehalts in Betracht gezogen: der Basisstundenlohn der Arbeiter (SHBO) und das Monatsgehalt pro Kopf (SMPT). In die Studie gehen aggregierte Daten zur gesamten französischen Wirtschaft über vier Jahrzehnte von der Einführung des gesetzlichen Mindestlohns 1970 bis zur Änderung des Zeitplans der jährlichen Anpassungen im Jahr 2009. Die Studie weist drei Besonderheiten gegenüber der bisher erschienen Literatur auf. Erstens umfasst sie wesentlich längere Zeiträume als diese und damit aussagekräftigeres Material. Zweitens berücksichtigten die angewandten Verfahren die Möglichkeit eines sehr langsamen, progressiven Einflusses des gesetzlichen Mindestlohns auf das Durchschnittsgehalt, wohingegen die bisherigen Untersuchungen im Allgemeinen von unmittelbareren Auswirkungen ausgingen. Drittens unterscheidet sie die möglichen Auswirkungen der Anpassungen des gesetzlichen Mindestlohns auf das Durchschnittsgehalt je nach deren Ursachen: preisabhängige Indexierung, Indexierung auf die Hälfte der Kaufkraftzunahme des Basisstundenlohns der Arbeiter (SHBO) und frei beschlossene Sondererhöhungen. Aufgrund frei beschlossener Sondererhöhungen wuchs der gesetzliche Mindestlohn in allen Jahrzehnten des Zeitraums 1970-2009 stärker als der Durchschnittslohn. Die Schätzungen zeigen im Übrigen, dass der Einfluss der Anpassungen des gesetzlichen Mindestlohns auf das Durchschnittsgehalt stark ist. Insbesondere die Erhöhungen durch gesetzliche Indexierung auf die Hälfte der Kaufkraftzunahme des Basisstundenlohns der Arbeiter (SHBO) hat starke Auswirkungen auf eben jenen Basisstundenlohn der Arbeiter (SHBO). Letzteres Ergebnis legt nahe, dass es eine starke zirkulare Wechselwirkung gibt, die diese beiden Größen beeinflusst. Durch die Modalitäten der Anpassung des gesetzlichen Mindestlohns und deren Auswirkungen auf das Durchschnittsgehalt ist Frankreich zweifelsohne eines der industrialisierten Länder, deren Wettbewerbsfähigkeit am anfälligsten gegenüber starken Inflationsschwankungen ist." (Autorenreferat, IAB-Doku)

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Del Carpio, Ximena, Ha Nguyen & Liang Choon Wang (2012): Does the minimum wage affect employment? Evidence from the manufacturing sector in Indonesia. (Policy research working paper 6147), Washington, DC, 36 S.

Abstract

"Using survey data from the Indonesian manufacturing industry, this paper investigates the impact of minimum wage on employment and wages offered by Indonesian manufacturing firms from 1993 to 2006. It shows that the estimated effects of minimum wage on employment are positive within a province (i.e., with province fixed effects), but negative within a firm (i.e., with firm fixed effects), indicating the importance of using firm panel data to reduce the endogeneity bias in estimates. It finds significant heterogeneous effects of minimum-wage changes on employment. The employment effects of minimum wages are significant and negative among small firms and less educated workers, but not among large firms and workers with high school education and above. The negative employment impact is more severe for non-production workers than for production workers. The analysis also shows that the minimum wage disproportionally affects women: most of the nonproduction job losses are experienced by female workers. Lastly, the paper finds that the minimum wage is more correlated with the average wage of small firms than that of large firms, suggesting that minimum wages are more binding in small firms." (Author's abstract, IAB-Doku) ((en))

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Dolton, Peter, Chiara Rosazza Bondibene & Michael Stops (2012): The spatial analysis of the employment effect of the minimum wage in a recession. The case of the UK 1999-2010. (Research reports commissioned for the Low Pay Commission Report 2012), London, 61 S.

Abstract

"This report assesses the impact of the National Minimum Wage (NMW) on employment in the UK over the 1999-2010 period explicitly modelling the effect of the 2008-10 recession. Identification is facilitated by using variation in the bite of the NMW across local labour markets with the use of the 'incremental differences-in-differences' (IDiD) estimator. We explicitly take account of the spatial nature of local labour markets by using commuting patterns to weight our estimation. We find that, even controlling for clear regional recessionary factors, there are small positive employment effects of the NMW from 2003-6, when the average bite of the NMW was at its highest since its introduction." (Author's abstract, IAB-Doku) ((en))

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Dolton, Peter, Chiara Rosazza-Bondibene & Jonathan Wadsworth (2012): Employment, inequality and the UK National Minimum Wage over the medium-term. In: Oxford Bulletin of Economics and Statistics, Jg. 74, H. 1, S. 78-106. DOI:10.1111/j.1468-0084.2011.00653.x

Abstract

"We assess the impact of the national minimum wage (NMW) on employment and inequality in the UK over the decade since its introduction. We evaluate its effects in each year, using an incremental differences-in-differences (IDiD) estimator. Identification is based on variation in the bite of the NMW across local labour markets and the different sized year on year up-ratings. We find that an increased bite of the NMW is associated with falls in lower tail wage inequality. While the average employment effect over the entire period is broadly neutral, there are small but significant positive NMW effects from 2003 onwards." (Author's abstract, IAB-Doku) ((en))

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Dolton, Peter & Chiara Rosazza-Bondibene (2012): The international experience of minimum wages in an economic downturn. In: Economic policy, Jg. 27, H. 69, S. 99-142. DOI:10.1111/j.1468-0327.2011.00278.x

Abstract

"What should governments do with the level of the minimum wage (MW) in times of recession? In an economic downturn when most workers face falling real wages is it appropriate to let the MW fall or are the positive effects of the MW on inequality enough to justify its uprating - and if so what might be the consequences on a country's employment level? This paper reports new estimates of the employment effects of the MW by focusing on the recessionary experiences across countries. Using international data we exploit: cross-national variation in the level and timing of the MW uprating and the exact timing of the recessionary experiences in different countries with a panel data set comprising 33 OECD over the period 1971 - 2009. Our panel data allow us to differentiate the effect of MWs on employment in periods of economic downturn as well as periods of economic growth. We also account for institutional and other policy related differences that might have an impact on employment other than the MW. We find that the answer depends on whether one considers adults or young people, and to some extent, on what measure of the MW is considered. The answer is also somewhat sensitive to whether one considers that the MW level is a choice option of the government which is inextricably interrelated to the determination of employment - that is, the extent to which the MW is endogenous. Using a 'political complexion of the government' instrumental variable (IV) we find that the MW only has a negative impact on youth employment. This leaves each government with the dilemma of raising the MW and reducing inequality or increasing the MW and accepting that this will reduce employment levels amongst young people and those on the margins of work." (Author's abstract, IAB-Doku) ((en))

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Dolton, Peter (2012): The administration and impact of a national minimum wage. Lessons for Germany. In: Journal for labour market research, Jg. 45, H. 3/4, S. 201-208., 2011-12-31. DOI:10.1007/s12651-012-0121-y

Abstract

"The problem of trying to estimate what the effect of the minimum wage will have on employment (or any other outcome) has puzzled economists for over 150 years. Some factions in Germany have recently contemplated supplementing their extensive system of sector and branch minimum wages with a National Minimum Wage (NMW). Perhaps some of the most valuable lessons for Germany can be drawn from the UK which introduced such a NMW as recently as 1999. This article provides an overview of recent evidence from the UK and other countries on the effects of the NMW and lessons to be drawn from instituting such a policy." (Author's abstract, IAB-Doku) ((en))

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Favrat, Adélaïde, Delphine Prady & Chloé Tavan (2012): Du Smic au niveau de vie. Composantes et évolutions. In: Economie et Statistique H. 448/449, S. 29-48.

Abstract

"Arbeitnehmer, die den gesetzlichen Mindeststundenlohn (SMIC) beziehen, befinden sich im Jahr 2011 öfters auf der unteren Stufe des Lebensstandard als die übrigen Arbeitnehmer: Ihr Lebensstandard stellt nur zwei Drittel desjenigen der Arbeitnehmer, die mehr als das 1,1-fache des gesetzlichen Mindestlohns verdienen. Ihre beruflichen Einnahmen sind auch deswegen geringer, weil sie häufiger nur teilzeitbeschäftigt sind und im Laufe des Jahrs öfter Perioden der Arbeitslosigkeit aufweisen. Das steuerliche und soziale System hat jedoch die Tendenz, den Abstand zu verringern, indem es den Lebensstandard der Mindestlohnverdiener um 8 % erhöht und denjenigen der Mehrverdiener verringert. Soziale Beihilfen und arbeitsfördernde Maßnahmen stellen insgesamt 11 % der verfügbaren Einnahmen der Mindestlohnverdiener dar. Der Beitrag der arbeitsfördernden Maßnahmen, Steuergeschenk an Kleinverdiener (PPE) und zulässige Zusatzbeschäftigung für Bezieher des Existenzminimums (RSA), bleibt jedoch gering im Vergleich zu den anderen Komponenten ihres verfügbaren Einkommens, wegen der Zeiträume von Arbeitslosigkeit oder zusätzlicher Einnahmen ihrer Haushalte, die dazu führen, dass sie einkommensabhängige Beihilfen nicht erhalten. Der Lebensstandard der Mindestlohnverdiener weist allerdings ziemlich große Unterschiede auf: bei 28 % von ihnen ist er höher als der mediane Lebensstandard. Dies erklärt sich insbesondere durch die Tätigkeitsdauer über das Jahr hin und auch durch Einnahmen des Ehepartners. Der Lebensstandard von allein erziehenden Mindestlohnverdienern ist wesentlich geringer als derjenige von kinderlosen Paaren trotz eines ziemlich gleichen Lohnniveaus. Die soziale und steuerliche Gesetzgebung hat es zwischen 1999 und 2012 ermöglicht, das tatsächlich verfügbare Einkommen der Mindestlohnverdiener schneller zu erhöhen als den gesetzlichen Mindestlohn (bei gegebener Familienzusammensetzung und Arbeitsdauer): Es nahm um 10 % zu, wohingegen der gesetzliche Mindestlohn nur um 7 % zunahm. Die Schaffung von Maßnahmen zur Förderung von Kleinverdienern - Steuergeschenk an Kleinverdiener (PPE) im Jahr 2001 und Existenzminimum (RSA) 2009 - hat eine entscheidende Rolle bei diesem Anstieg gespielt." (Autorenreferat, IAB-Doku)

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Ford, William F., Travis Minor & Mark F. Owens (2012): State minimum wage differences: economic factors or political inclinations? In: Business Economics, Jg. 47, H. 1, S. 57-67. DOI:10.1057/be.2011.37

Abstract

"This paper examines the importance of factors that influence a state's decision to adopt an above-federal minimum wage level. Our results indicate that state political leanings are the primary factor explaining differences in state minimum wage laws since 1991. Further, state cost of living differences do not appear to influence a state's decision to increase its minimum wage above the federal level. This result is interesting since proponents of raising the minimum wage cite the rising cost of living as a principal justification for an increase. Our findings should be of special interest to economists responsible for analyzing and forecasting labor cost trends within and among states where their employers operate or plan to relocate." (Author's abstract, IAB-Doku) ((en))

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Lee, Sangheon (2012): "Varieties of minimum wage system" through the dubious lens of indicator-based rankings. In: International Labour Review, Jg. 151, H. 3, S. 261-275. DOI:10.1111/j.1564-913X.2012.00148.x

Abstract

"Growing interest in the impact of labour regulations on labour market performance has prompted attempts to quantify labour standards for cross-country comparison. While recognizing the contribution of such quantification to empirical research, this article takes issue with indicators that purport to rank countries' regulatory regimes. With reference to the minimum wage component of the World Bank's Doing Business indicators, the author identifies major limitations of this device-theoretical bias, measurement error, disregard of institutional particulars and failure to account for regulatory indeterminacy. His examination of minimum wage systems concludes with an argument against the grounding of policy decisions on indicator-based rankings." (Author's abstract, IAB-Doku) ((en))

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Lin, Carl (2012): Less myth, more measurement: Decomposing excess returns from the 1989 minimum wage hike. (IZA discussion paper 6269), Bonn, 28 S.

Abstract

"In the book Myth and Measurement, Card and Krueger (1995) examine the economic impact of the 1989 minimum wage hike on the welfare of 110 firms which employ a disproportionate number of minimum-wage workers. Their results show mixed evidence that excess returns associated with news about the 1989 minimum-wage legislation. This paper re-examines this question by decomposing excess returns. Our simple and intuitive approach attributes excess returns to either differences in market performances (economy-wide factors) or firm-specific traits (individualistic factors). We likewise show that, generally, minimum wage legislation had little or no effect on employer wealth. However, by decomposing total excess returns, we find that the apparent lack of an effect is a consequence of two off-setting forces: (1) a negative effect arising from firm-specific traits (adverse information on minimum-wage worker employers) and (2) a positive effect arising from market performance. In other words, we show that while the aggregate effect of the 1989 minimum wage hike was neutral, there was a significant negative impact on firms that was neutralized by positive market performance." (Author's abstract, IAB-Doku) ((en))

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Marx, Ive, Sarah Marchal & Brian Nolan (2012): Mind the gap: Net incomes of minimum wage workers in the EU and the US. (European Trade Union Institute. Working paper 2012,05), Brüssel, 34 S.

Abstract

"This paper focuses on the role of minimum wages, tax and benefit policies in protecting workers against financial poverty, covering 21 European countries with a national minimum wage and three US States (New Jersey, Nebraska and Texas). It is shown that only for single persons and only in a number of countries, net income packages at minimum wage level reach or exceed the EU's at-risk-of poverty threshold, set at 60 per cent of median equivalent household income in each country. For lone parents and sole breadwinners with a partner and children to support, net income packages at minimum wage are below this threshold almost everywhere, usually by a wide margin. This is the case despite shifts over the past decade towards tax relief and additional income support provisions for low-paid workers. We argue that there appear to be limits to what minimum wage policies alone can achieve in the fight against in-work poverty. The route of raising minimum wages to eliminate poverty among workers solely reliant on it seems to be inherently constrained, especially in countries where the distance between minimum and average wage levels is already comparatively small and where relative poverty thresholds are mostly a function of the dual-earner living standards. In order to fight in-work poverty new policy routes need to be explored. The paper offers a brief discussion of possible alternatives and cautions against 'one size fits all' policy solutions." (Author's abstract, IAB-Doku) ((en))

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Marx, Ive, Sarah Marchal & Brian Nolan (2012): Mind the gap: Net incomes of minimum wage workers in the EU and the US. (IZA discussion paper 6510), Bonn, 25 S.

Abstract

"This paper focuses on the role of minimum wages, tax and benefit policies in protecting workers against financial poverty, covering 21 European countries with a national minimum wage and three US States (New Jersey, Nebraska and Texas). It is shown that only for single persons and only in a number of countries, net income packages at minimum wage level reach or exceed the EU's at-risk-of poverty threshold, set at 60 per cent of median equivalent household income in each country. For lone parents and sole breadwinners with a partner and children to support, net income packages at minimum wage are below this threshold almost everywhere, usually by a wide margin. This is the case despite shifts over the past decade towards tax relief and additional income support provisions for low-paid workers. We argue that there appear to be limits to what minimum wage policies alone can achieve in the fight against in-work poverty. The route of raising minimum wages to eliminate poverty among workers solely reliant on it seems to be inherently constrained, especially in countries where the distance between minimum and average wage levels is already comparatively small and where relative poverty thresholds are mostly a function of the dual-earner living standards. In order to fight in-work poverty new policy routes need to be explored. The paper offers a brief discussion of possible alternatives and cautions against 'one size fits all' policy solutions." (Author's abstract, IAB-Doku) ((en))

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Neumark, David, J.M. Ian Salas & William Wascher (2012): Revisiting the minimum wage-employment debate. Throwing out the baby with the bathwater? (NBER working paper 18681), Cambridge, Mass., 59 S. DOI:10.3386/w18681

Abstract

"We revisit the minimum wage-employment debate, which is as old as the Department of Labor. In particular, we assess new studies claiming that the standard panel data approach used in much of the 'new minimum wage research' is flawed because it fails to account for spatial heterogeneity. These new studies use research designs intended to control for this heterogeneity and conclude that minimum wages in the United States have not reduced employment. We explore the ability of these research designs to isolate reliable identifying information and test the untested assumptions in this new research about the construction of better control groups. Our evidence points to serious problems with these research designs. We conclude that the evidence still shows that minimum wages pose a trade-off of higher wages for some against job losses for others, and that policymakers need to bear this trade-off in mind when making decisions about increasing the minimum wage." (Author's abstract, IAB-Doku) ((en))

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Neumark, David, Matthew Thompson & Leslie Koyle (2012): The effects of living wage laws on low-wage workers and low-income families. What do we know now? In: IZA journal of labor policy, Jg. 1, S. 1-44. DOI:10.1186/2193-9004-1-11

Abstract

"We provide updated evidence on the effects of living wage laws in U.S. cities, relative to the earlier research covering only the first six or seven years of existence of these laws. There are some challenges to updating the evidence, as the CPS data on which it relies changed geographic coding systems in the mid-2000s. The updated evidence is broadly consistent with the conclusions reached by prior research, including a recent review of that earlier evidence. Living wage laws reduce employment among the least-skilled workers they are intended to help. But they also increase wages for many of them. This implies that living wage laws generate both winners and losers among those affected by them. For broader living wage laws that cover recipients of business or financial assistance from cities, the net effects point to modest reductions in urban poverty." (Author's abstract, IAB-Doku) ((en))

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Papps, Kerry L. (2012): The effects of social security taxes and minimum wages on employment. Evidence from Turkey. In: ILR review, Jg. 65, H. 3, S. 686-707. DOI:10.1177/001979391206500309

Abstract

"Using worker-level panel data for the period from 2002 to 2005, the author analyzes the separate employment effects of increases in the social security taxes paid by employers and increases in the minimum wage in Turkey. Variation over time among low-wage workers in the ratio of total labor costs to the gross wage gives rise to a natural experiment. The author's regression estimates indicate that a given increase in social security taxes has a larger negative effect on the probability of a worker remaining employed in the next quarter than an equal size increase in the minimum wage. This result is incompatible with the textbook model of labor supply and demand, and it suggests that workers may increase effort in response to an increase in wages. The author's comparison of the employment responses of workers in different demographic groups provides some indirect evidence that the central finding is consistent with this explanation." (Author's abstract, IAB-Doku) ((en))

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Pelek, Selin & Oana Calavrezo (2012): Les emplois du bas de l'échelle salariale en Turquie. Une description des salariés des secteurs formels et informels, hors agriculture. In: Travail et emploi H. 126, S. 45-60.

Abstract

"This paper aims to identify the characteristics of low-wage workers in Turkey. In this country, the labor market is segmented between formal and informal employment. Therefore, the authors distinguish two categories of workers : workers earning the minimum wage in formal employment and workers earning the minimum wage and less than the minimum wage in informal employment. They use simple descriptive statistical methods and implement logit models on original data from the Budget survey of the Turkish Statistical Institute over the period 2003-2006. Their analysis points out a number of common features for low-wage workers in formal and informal employment : they are more often women, young people, individuals living in the countryside, employees with less firm specific seniority and people receiving a financial aid from the State. But low-wage workers can be divided in two categories. On the one hand, workers in formal employment earning the minimum wage work either in small firms in the tertiary sector or in bigger firms (25 to 49 employees) in the industrial sector. On the other hand, low-wage workers in informal employment are more often women with a secondary education, working in the tertiary sector and earning a salary which might represent a supplementary income. The socioeconomic characteristics of minimum wage workers in formal employment are more similar to the characteristics of workers paid below the minimum wage level working in an informal employment." (Author's abstract, IAB-Doku) ((en))

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Rycx, François & Stephan Kampelmann (2012): Who earns minimum wages in Europe? New evidence based on household surveys. (Report / European Trade Union Institute 124), Brüssel, 64 S.

Abstract

"Minimum wages continue to stir controversial policy debates. This study contributes to a better understanding of minimum wages by providing a solid empirical assessment of minimum wage policies and their socio-economic consequences for a range of European countries. In addition to qualitative differences between minimum wage systems, the report documents international variations in the (absolute and relative) levels of minimum wages. An important contribution of the study is to provide a statistical panorama of the population of minimum wage earners." (Author's abstract, IAB-Doku) ((en))

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Sabia, Joseph J., Richard V. Burkhauser & Benjamin Hansen (2012): Are the effects of minimum wage increases always small? New evidence from a case study of New York State. In: ILR review, Jg. 65, H. 2, S. 350-376. DOI:10.1177/001979391206500207

Abstract

"The authors estimate the effect of the 2004-6 New York State (NYS) minimum wage increase from $5.15 to $6.75 per hour on the employment rates of 16- to 29-year-olds who do not have a high school diploma. Using data drawn from the 2004 and 2006 Current Population Survey, they employ difference-in-difference estimates to show that the NYS minimum wage increase is associated with a 20.2% to 21.8% reduction in the employment of less-skilled, less-educated workers, with the largest effects on those aged 16 to 24. Their estimates imply a median employment elasticity with respect to the minimum wage of around - 0.7, large relative to previous researchers' estimates. The authors' findings are robust to their choice of geographically proximate comparison states, the use of a more highly skilled within-state comparison group, and a synthetic control design approach. Moreover, their results provide plausible evidence that state minimum wage increases can have substantial adverse labor demand effects for low-skilled individuals that are outside previous elasticity estimates, ranging from - 0.1 to - 0.3." (Author's abstract, IAB-Doku) ((en))

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Schulten, Thorsten (2012): WSI-Mindestlohnbericht 2012. Schwache Mindestlohnentwicklung unter staatlicher Austeritätspolitik. In: WSI-Mitteilungen, Jg. 65, H. 2, S. 124-130. DOI:10.5771/0342-300X-2012-2-124

Abstract

"Der WSI-Mindestlohnbericht 2012 gibt einen aktuellen Überblick über die gegenwärtige Mindestlohnpolitik in Europa und ausgewählten außereuropäischen Staaten. Unter Auswertung der WSI-Mindestlohndatenbank werden neueste Daten zur Höhe und Entwicklung gesetzlicher Mindestlöhne präsentiert. Im Jahr 2011 wurden die Mindestlöhne in der Regel nur geringfügig angehoben oder sogar gänzlich eingefroren. In den meisten europäischen Ländern erlitten die Mindestlohnbezieher zum Teil deutliche Reallohnverluste. Im Rahmen des aktuellen Krisenmanagements in der Europäischen Union wurde die Mindestlohnpolitik zum Bestandteil einer allgemeinen Austeritätspolitik." (Autorenreferat, IAB-Doku)

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Schulten, Thorsten (2012): European minimum wage policy: A concept for wage-led growth and fair wages in Europe. In: Labour education, Jg. 4, H. 1, S. 85-103.

Abstract

"To sum up, a European minimum wage policy could make a major contribution for the development of a new more sustainable, wage-led growth model in Europe. At the same time it would give a concrete expression for the idea of 'social Europe' and would bring new legitimacy to the European integration process. However, the political enforcement of a European minimum wage policy requires a European social movement which is able to push this issue at the European policy agenda. In this respect it seems that the European trade unions and other social forces still have some way to go." (Text excerpt, IAB-Doku) ((en))

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Slonimczyk, Fabian & Peter Skott (2012): Employment and distribution effects of the minimum wage. In: Journal of Economic Behavior and Organization, Jg. 84, H. 1, S. 245-264. DOI:10.1016/j.jebo.2012.03.005

Abstract

"This paper analyzes the effects of the minimum wage on wage inequality, relative employment and over-education. We show that over-education can be generated endogenously and that an increase in the minimum wage can raise both total and low-skill employment, and produce a fall in inequality. Evidence from the US suggests that these theoretical results are empirically relevant. The over-education rate has been increasing and our regression analysis suggests that the decrease in the minimum wage may have led to a deterioration of the employment and relative wage of low-skill workers." (Author's abstract, IAB-Doku) ((en))

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Stewart, Mark B. (2012): Wage inequality, minimum wage effects, and spillovers. In: Oxford economic papers, Jg. 64, H. 4, S. 616-634. DOI:10.1093/oep/gps003

Abstract

"This paper investigates possible spillover effects of the UK minimum wage. The halt in the growth in inequality in the lower half of the wage distribution (as measured by the 50:10 percentile ratio) since the mid-1990s, in contrast to the continued inequality growth in the upper half of the distribution, suggests the possibility of a minimum wage effect and spillover effects on wages above the minimum. This paper analyses individual wage changes, using both a difference-in-differences estimator and a specification involving comparisons across minimum wage upratings, and concludes that there have not been minimum wage spillovers. Since the UK minimum wage has always been below the 10th percentile, this lack of spillovers implies that minimum wage changes have not had an effect on the 50:10 percentile ratio measure of inequality in the lower half of the wage distribution." (Author's abstract, IAB-Doku) ((en))

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Ven, Justin van de (2012): Implications of the National Employment Savings Trust for vulnerable sectors of the UK labour market. A reduced-form statistical evaluation. In: National Institute Economic Review, Jg. 219, H. 1, S. R77-R89. DOI:10.1177/002795011221900108

Abstract

"The National Employment Savings Trust (NEST) is a new pension scheme that will be introduced for employees on modest incomes in the UK from 2012. This paper draws out the implications of the NEST, focusing upon low-paid employees and their employers using data from the Annual Survey of Hours and Earnings. The results suggest that the NEST will increase labour costs by between 0.6 and 0.8 per cent on average, and have a disproportionate effect on low pay industries and private sector firms employing fewer than 25 employees. The analysis highlights the potential role of the minimum wage to shield low pay workers from paying a share of the subsidies that the NEST will afford to its members." (Author's abstract, IAB-Doku) ((en))

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Abe, Yukiko (2011): Minimum wages and employment in Japan. In: Japan labor review, Jg. 8, H. 2, S. 42-54.

Abstract

"This paper surveys issues associated with the minimum wage and its economic impacts in Japan. First, I discuss how the minimum wage is discussed in recent political debates. Next, I explain economic factors surrounding the Japanese labor market that are related to the minimum wage: specifically, I take up the issues of globalization and 'mismatch' (i.e., a labor shortage exists in some industries and/or occupations and, at the same time, there is unemployment). Then, I provide an overview of facts regarding the minimum wage for the past two decades. Finally, I critically review recent empirical studies that examine the employment effects of the minimum wage (Tachibanaki and Urakawa 2007; Kambayashi, Kawaguchi, and Yamada 2009)." (Author's abstract, IAB-Doku) ((en))

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Addison, John T., McKinley L. Blackburn & Chad D. Cotti (2011): Minimum wage increases under straightened circumstances. (IZA discussion paper 6036), Bonn, 42 S.

Abstract

"Do apparently large minimum wage increases in an environment of recession produce clearer evidence of disemployment effects than is typically observed in the new minimum wage literature? This paper augments the sparse literature on the most recent increases in the U.S. minimum wage, using three different data sets and the two main estimation strategies for handling geographically-disparate trends. The evidence is generally unsupportive of negative employment effects, still less of a 'recessionary multiplier.' Minimum wage workers seem to be concentrated in sectors of the economy for which the labor demand response to wage mandates is minimal." (Author's abstract, IAB-Doku) ((en))

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Ahn, Tom, Peter Arcidiacono & Walter Wessels (2011): The distributional impacts of minimum wage increases when both labor supply and labor demand are endogenous. In: Journal of business and economic statistics, Jg. 29, H. 1, S. 12-23. DOI:10.1198/jbes.2010.07076

Abstract

"We develop and estimate a one-shot search model with endogenous firm entry, and therefore zero expected profits, and endogenous labor supply. Positive employment effects from a minimum wage increase can result as the employment level depends upon both the numbers of searching firms and workers. Welfare implications are similar to the classical analysis: workers who most want the minimum wage jobs are hurt by the minimum wage hike with workers marginally interested in minimum wage jobs benefiting. We estimate the model using CPS data on teenagers and show that small changes in the employment level are masking large changes in labor supply and demand. Teenagers from well-educated families see increases in their employment probabilities and push out their less-privileged counterparts from the labor market. This article has supplementary material online." (Author's abstract, IAB-Doku) ((en))

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Alaniz, Enrique, T. H. Gindling & Katherine Terrell (2011): The impact of minimum wages on wages, work and poverty in Nicaragua. In: Labour economics, Jg. 18, H. S1, S. S45-S59. DOI:10.1016/j.labeco.2011.06.010

Abstract

"In this paper we use an individual- and household-level panel data set to study the impact of changes in legal minimum wages on a host of labor market outcomes including: a) wages and employment, b) transitions of workers across jobs (in the covered and uncovered sectors) and employment status (unemployment and out of the labor force), and c) transitions into and out of poverty. We find that changes in the legal minimum-wage affect only those workers whose initial wage (before the change in minimum wages) is close to the minimum. For example, increases in the legal minimum wage lead to significant increases in the wages and decreases in employment of private covered sector workers who have wages within 20% of the minimum wage before the change, but have no significant impact on wages in other parts of the distribution. The estimates from the employment transition equations suggest that the decrease in covered private sector employment is due to a combination of layoffs and reductions in hiring. Most workers who lose their jobs in the covered private sector as a result of higher legal minimum-wages leave the labor force or go into unpaid family work; a smaller proportion find work in the public sector. We find no evidence that these workers become unemployed. Our analysis of the relationship between the minimum wage and household income finds: a) increases in legal minimum wages increase the probability that a poor worker's family will move out of poverty, and b) increases in legal minimum-wages are more likely to reduce the incidence of poverty and improve the transition from poor to non-poor if they impact the head of the household rather than the non-head; this is because the head of the household is less likely than a non-head to lose his/her covered sector employment due to a minimum wage increase and because those heads that do lose covered sector employment are more likely to go to another paying job than are non-heads (who are more likely to go into unpaid family work or leave the labor force)." (Author's abstract, IAB-Doku) ((en))

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Allegretto, Sylvia A., Arindrajit Dube & Michael Reich (2011): Do minimum wages really reduce teen employment? Accounting for heterogeneity and selectivity in state panel data. (IRLE working paper 2011-166), Berkeley, CA, 51 S.

Abstract

"Traditional estimates of minimum wage effects include controls for state unemployment rates and state and year fixed-effects. Using CPS data on teens for the period 1990 - 2009, we show that such estimates fail to account for heterogeneous employment patterns that are correlated with selectivity among states with minimum wages. As a result, the estimates are often biased and vary with the source of identifying variation. Including controls for long-term growth differences among states and for heterogeneous economic shocks renders the employment and hours elasticities indistinguishable from zero and rules out any but small disemployment effects. Dynamic evidence further shows the nature of bias in traditional estimates, and it also rules out more negative long run effects. We do not find evidence of heterogeneous employment effects in different parts of the business cycle. We also consider predictable versus unpredictable changes in the minimum wage by looking at indexation of the minimum wage in some states." (Author's abstract, IAB-Doku) ((en))

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Bianchi, Doris, Stefan Giger, Daniel Lampart, Daniele Lenzin, Alessandro Pelizzari, Andreas Rieger & Georges Tissot (2011): Mindestlohn: Situation und Handlungsbedarf. Bericht der SGB-Expertengruppe Mindestlohn. Zürich: Editions à la carte, 127 S.

Abstract

"Seit Mitte der Neunzigerjahre erleben Mindestlöhne eine neue Blüte. England führt beispielweise einen Mindestlohn ein, viele Länder erhöhen ihren. Und in der Schweiz führen die Gewerkschaften ihre mehrjährige Kampagne 'Keine Löhne unter 3000 Franken'. Damit gelingt es, die Einkommenssituation von vielen Tausend Personen zu verbessern. Gleichzeitig bewertet die ökonomische Forschung die Mindestlöhne neu - vor allem was deren Auswirkungen auf Beschäftigung und Arbeitslosigkeit betrifft. Mindestlöhne werden mehr und mehr als wirksames Mittel gegen Lohnunterbietung empfohlen sowie für die Verbesserung der Lohnsituation. Diese Studie analysiert gut ein Jahrzehnt nach der Wiederentdeckung der Mindestlöhne die Situation und den Handlungsbedarf im Mindestlohn- und Tieflohnbereich in der Schweiz. Untersucht wird aber auch die Lage in Europa." (Autorenreferat, IAB-Doku)

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Bosch, Gerhard, Claudia Weinkopf & Georg Worthmann (2011): Die Fragilität des Tarifsystems. Einhaltung von Entgeltstandards und Mindestlöhnen am Beispiel des Bauhauptgewerbes. (Forschung aus der Hans-Böckler-Stiftung 128), Berlin: Edition Sigma, 242 S.

Abstract

"Das Tarifsystem in Deutschland wird zunehmend fragiler. Die Tarifbindung ist zurückgegangen und tarifliche Öffnungs- und Härteklauseln, die auf betrieblicher Ebene vorübergehende Tarifunterschreitungen zulassen, haben an Bedeutung gewonnen. Am Beispiel des Bauhauptgewerbes untersuchen die Verfasser, inwiefern Mindest- und Tariflöhne in der Praxis eingehalten werden und wie sich dies kontrollieren lässt. Die Branche ist besonders interessant, weil sie eine überdurchschnittlich hohe Tarifbindung aufweist und hier bereits seit 1996 tarifliche Mindestlöhne gelten, die über das Arbeitnehmer-Entsendegesetz für allgemeinverbindlich erklärt worden sind. Die Studie, die auch auf bauspezifische Regelungen in Frankreich, Großbritannien und den Niederlanden eingeht sowie Erfahrungen mit Mindestlöhnen in zwei weiteren Branchen in Deutschland einbezieht, schließt nicht nur eine Forschungslücke im Bereich der Lohnpolitik und der industriellen Beziehungen. Vielmehr sind die Ergebnisse auch von hohem praktischen Wert für Tarifpartner und Politik, deren Diskurse und Entscheidungen in künftigen Verhandlungen über Mindestlöhne und Tarifverträge durch eine gemeinsame empirische Basis versachlicht werden können." (Autorenreferat, IAB-Doku)

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Dickens, Richard, Rebecca Riley & David Wilkinson (2011): The UK minimum wage at age 22. A regression discontinuity approach. (NIESR discussion paper 378), London, 37 S.

Abstract

"A regression discontinuity approach is used to analyse the effect of the legislated increase in the UK National Minimum Wage (NMW) that occurs at age 22 on various labour market outcomes. Using data from the Labour Force Survey we find a 2-4% point increase in the employment rate of low skilled individuals. Unemployment declines among men and inactivity among women. We find no such effect before the NMW was introduced and no robust impacts at age 21 or 23 years. Our results are robust to a range of specification tests." (Author's abstract, IAB-Doku) ((en))

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Draca, Mirko, Stephen Machin & John Van Reenen (2011): Minimum wages and firm profitability. In: American Economic Journal. Applied Economics, Jg. 3, H. 1, S. 129-151. DOI:10.1257/app.3.1.129

Abstract

Obwohl es eine umfangreiche Literatur zu den ökonomischen Auswirkungen von Mindestlöhnen auf die Arbeitsmarktlage (speziell die Beschäftigung) gibt, existieren kaum Belege für ihre Auswirkungen auf die Leistungsfähigkeit von Unternehmen. Das ist überraschend, da Mindestlöhne einen signifikanten Einfluss auf die Löhne auszuüben scheinen, aber nur einen geringen Einfluss auf die Anzahl der Stellen, so dass es natürlich ist, sich vorzustellen, dass ein stärkerer Einfluss auf andere Aspekte des Unternehmensverhaltens existieren muss. Der Beitrag befasst sich mit dem Einfluss von Mindestlöhnen auf die Rentabilität von Unternehmen unter Auswertung der Entwicklung nach Einführung eines Mindestlohns auf dem britischen Arbeitsmarkt im Jahre 1999. Es werden Informationen aus dem vorpolitischen Raum zur Einkommensverteilung genutzt, um Behandlungs- und Vergleichsgruppen zu konstruieren und einen Difference-in-Differences-Ansatz zu implementieren. Es wird gezeigt, dass durch die Einführung des Mindestlohns die Unternehmensrentabilität signifikant reduziert wurde (und die Löhne signifikant stiegen). Dies ergibt sich aus getrennten Analysen zweier unterschiedlicher Arten von Paneldaten auf der Unternehmensebene, einmal von Unternehmen der ambulanten Altenpflege, die den Niedriglohnsektor repräsentieren, und zum zweiten von Unternehmen quer durch alle Wirtschaftszweige. Interessanterweise gibt es keinen Hinweis darauf, dass die Senkung der Rentabilität ein Anwachsen der Unternehmensinsolvenzen zur Folge hatte. In diesem Sinne werden die Ergebnisse als Umverteilung von Quasi-Erträgen hin zu den niedrig bezahlten Beschäftigten interpretiert. (IAB)

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Dube, Arindrajit, T. William Lester & Michael Reich (2011): Do frictions matter in the labor market? Accessions, separations and minimum wage effects. (IRLE working paper 2010-222), Berkeley, CA, 39 S.

Abstract

"We provide the first test of the effects of U.S. minimum wages on labor market flows (accession, separation and turnover rates). Using county pairs straddling borders with minimum wage differences, we find large negative effects on all three measures, but no disemployment effects on teens or restaurant workers. Separation and accessions among restaurant workers falls considerably among fast food establishments, among teens and young adults, and for jobs with less than one quarter tenure. The teen, young adult, and female compositions of the restaurant workforce do not change in response to minimum wage increases. Among all teen workers (including those not working in restaurants), we find similar patterns of lower turnover coupled with employment effects close to zero. We show that these results are consistent with a wage-posting model, under conditions containing a substantial extent of friction and a high market-level labor supply elasticity." (Author's abstract, IAB-Doku) ((en))

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Dube, Arindrajit, T. William Lester & Michael Reich (2011): Do frictions matter in the labor market? Accessions, separations and minimum wage effects. (IZA discussion paper 5811), Bonn, 41 S.

Abstract

"We provide the first test of the effects of U.S. minimum wages on labor market flows (accession, separation and turnover rates). Using county pairs straddling borders with minimum wage differences, we find large negative effects on all three measures, but no disemployment effects on teens or restaurant workers. Separation and accessions among restaurant workers falls considerably among fast food establishments, among teens and young adults, and for jobs with less than one quarter tenure. The teen, young adult, and female compositions of the restaurant workforce do not change in response to minimum wage increases. Among all teen workers (including those not working in restaurants), we find similar patterns of lower turnover coupled with employment effects close to zero. We show that these results are consistent with a wage-posting model, under conditions containing a substantial extent of friction and a high market-level labor supply elasticity." (Author's abstract, IAB-Doku) ((en))

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Flinn, Christopher J. (2011): The minimum wage and labor market outcomes. Cambridge: MIT Press, 306 S.

Abstract

"In The Minimum Wage and Labor Market Outcomes, Christopher Flinn argues that in assessing the effects of the minimum wage (in the United States and elsewhere), a behavioral framework is invaluable for guiding empirical work and the interpretation of results. Flinn develops a job search and wage bargaining model that is capable of generating labor market outcomes consistent with observed wage and unemployment duration distributions, and also can account for observed changes in employment rates and wages after a minimum wage change. Flinn uses previous studies from the minimum wage literature to demonstrate how his model can be used to rationalize and synthesize the diverse results found in widely varying institutional contexts. He also shows how observed wage distributions from before and after a minimum wage change can be used to determine if the change was welfare-improving. More ambitiously, and perhaps controversially, Flinn proposes the construction and formal estimation of the model using commonly available data; model estimates then enable the researcher to determine directly the welfare effects of observed minimum wage changes. This model can be used to conduct counterfactual policy experiments - even to determine 'optimal' minimum wages under a variety of welfare metrics.
The development of the model and the econometric theory underlying its estimation are carefully presented so as to enable readers unfamiliar with the econometrics of point process models and dynamic optimization in continuous time to follow the arguments. Although most of the book focuses on the case where only the unemployed search for jobs in a homogeneous labor market environment, later chapters introduce on-the-job search into the model, and explore its implications for minimum wage policy. The book also contains a chapter describing how individual heterogeneity can be introduced into the search, matching, and bargaining framework." (Author's abstract, IAB-Doku) ((en))

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Healy, Joshua (2011): The quest for fairness in Australian minimum wages. In: The Journal of Industrial Relations, Jg. 53, H. 5, S. 662-680. DOI:10.1177/0022185611419618

Abstract

"The attainment of 'fairness' is widely regarded as a worthy goal of setting minimum wages, but opinions differ sharply over how to achieve it. This article examines how interpretations of fairness shaped the minimum wage decisions of the Australian Industrial Relations Commission between 1997 and 2005. It explores the Commission's approaches to three aspects of fairness in minimum wages: first, eligibility for increases; second, the form of increase; and third, the rate of increase over time. The Australian Industrial Relations Commission consistently gave minimum wage increases that were expressed in dollar values and applied to all federal awards. Its decisions delivered real wage increases for the lowest paid, but led to falls in real and relative wages for the majority of award-reliant workers. Fair Work Australia, the authority now responsible for setting minimum wages in the national system, appears apprehensive about parts of the Australian Industrial Relations Commission's legacy and has foreshadowed a different approach, particularly with respect to the form of adjustment." (Author's abstract, IAB-Doku) ((en))

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Körner, Marita (2011): Mindestlohnanforderungen im internationalen Arbeitsrecht. In: Neue Zeitschrift für Arbeitsrecht, Jg. 28, H. 8, S. 425-430.

Abstract

"Die Forderungen nach einem gesetzlichen (einheitlichen) Mindestlohn sind nicht zuletzt auch durch den Deutschen Juristentag im Jahr 2010 vehementer geworden. Wie sieht nun das Spektrum des Niedriglohnsektors international, vor allem 'europäisch' aus und welche Schlussfolgerungen sind daraus für den nationalen Gesetzgeber zu ziehen? All diesen Fragen geht die Verfasserin in ihrem Beitrag nach." (Autorenreferat, IAB-Doku)

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Lee, Wang-Sheng & Sandy Suardi (2011): Minimum wages and employment. Reconsidering the use of a time-series approach as an evaluation tool. In: BJIR, Jg. 49, H. s2, S. s376-s401. DOI:10.1111/j.1467-8543.2010.00799.x

Abstract

"The time-series approach used in the minimum wage literature essentially aims to estimate a treatment effect of increasing the minimum wage. In this paper, we employ a novel approach based on aggregate time-series data that allows us to determine if minimum wage changes have significant effects on employment. This involves the use of tests for structural breaks as a device for identifying discontinuities in the data which potentially represent treatment effects. In an application based on Australian data, the tentative conclusion is that the introduction of minimum wage legislation in Australia in 1997 and subsequent minimum wage increases appear not to have had any significant negative employment effects for teenagers." (Author's abstract, IAB-Doku) ((en))

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Marks, Mindy S. (2011): Minimum wages, employer-provided health insurance, and the non-discrimination law. In: Industrial relations, Jg. 50, H. 2, S. 241-262. DOI:10.1111/j.1468-232X.2011.00635.x

Abstract

"This article exploits cross-state variation in minimum wages to investigate the impact of minimum wage changes on employer-provided health insurance. In contrast to the existing empirical literature, this article considers an environment where some firms are constrained by non-discrimination laws that govern the provision of health insurance. For these firms, minimum wage changes do not reduce the probability that workers will receive employer-provided health insurance. For firms not covered by the non-discrimination law, and free to tailor their fringe benefits, low-skilled workers experience a disproportionate reduction in the availability and generosity of health insurance after a minimum wage increase." (Author's abstract, IAB-Doku) ((en))

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Neumark, David & William Wascher (2011): Does a higher minimum wage enhance the effectiveness of the Earned Income Tax Credit? In: Industrial and Labor Relations Review, Jg. 64, H. 4, S. 712-746.

Abstract

"The authors estimate the effects of the interactions between the Earned Income Tax Credit (EITC) and minimum wages on labor market outcomes. They use information on policy variation from the Department of Labor's Monthly Labor Review, reports published by the Center on Budget and Policy Priorities, and data on individuals and families from the Current Population Survey to assess the economic impact of minimum wages and the EITC on families. Their results indicate that for single women with children, the EITC boosts employment and earnings, and coupling the EITC with a higher minimum wage enhances this positive effect. Conversely, for less-skilled minority men and for women without children, employment and earnings are more adversely affected by the EITC when the minimum wage is higher. Turning from individuals to families, for very poor families with children a higher minimum wage increases the positive impact of the EITC on incomes, so that a higher minimum wage appears to enhance the effects of the EITC. Whether the policy combination of a high EITC and a high minimum wage is viewed as favorable or unfavorable depends in Part on whom policymakers are trying to help." (Author's abstract, IAB-Doku) ((en))

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Ohashi, Isao (2011): The minimum wage system in Japan. In light of circumstances in the United States and Europe. In: Japan labor review, Jg. 8, H. 2, S. 4-23.

Abstract

"This paper aims to provide an overview of the history of the minimum wage system in Japan and to explore why it is in its current state and how it should change in the future, in light of the state of minimum wages in the United States and Europe and the relevant debates that are ongoing in those areas. Specifically, I will make a cross-country comparison of the mechanisms whereby the minimum wage is set, explain how the differences in these mechanisms affect the level and trends of minimum wages, and shed light on the weaknesses of the foundations of theoretical modeln designed to verify the positive effects of a minimum wage increase on employment. This research is intended to help achieve a better understanding of the significance to Japan's labor market of the government initiative to considerably raise the minimum wage following the amendment of the Minimum Wages Act, and to examine how the minimum wage system in Japan should develop in the future, while taking account of the state of minimum wage systems in the United States and Europe." (Author's abstract, IAB-Doku) ((en))

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Pacheco, Gail (2011): Estimating employment impacts with binding minimum wage constraints. In: The Economic Record, Jg. 87, H. 279, S. 587-602. DOI:10.1111/j.1475-4932.2011.00722.x

Abstract

"This article examines the impact of rising minimum wages on employment in New Zealand over the time period 1986-2004. Detailed wage data from Statistics New Zealand allows the construction of predicted probabilities for each individual in the sample being affected by a rising minimum wage, and hence finding the wage floor binding. These probabilities are then interacted with the real minimum wage level in the employment regressions to ensure analysis is restricted to the individuals most at risk when the minimum wage is raised. Comparing results before and after using these binding constraints in the regressions reveal significant negative employment effects of a higher minimum wage." (Author's abstract, IAB-Doku) ((en))

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Pedace, Roberto & Stephanie Rohn (2011): The impact of minimum wages on unemployment duration. Estimating the effects using the Displaced Worker Survey. In: Industrial relations, Jg. 50, H. 1, S. 57-75. DOI:10.1111/j.1468-232X.2010.00625.x

Abstract

"This paper examines the impact of minimum wages on unemployment duration. Our estimates suggest that higher minimum wages are associated with shorter unemployment duration for older males and those with at least a high school diploma, but longer unemployment spells for male high school dropouts and females who are older and in lower-skilled occupations. The results are consistent with other studies in generating concerns about the distributional impact of minimum wages." (Author's abstract, IAB-Doku) ((en))

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Rohlin, Shawn M. (2011): State minimum wages and business location. Evidence from a refined border approach. In: Journal of urban economics, Jg. 69, H. 1, S. 103-117. DOI:10.1016/j.jue.2010.08.001

Abstract

"This study examines the effect of state minimum wage changes on new and existing business establishments. It employs a refined border approach in conjunction with other differencing methods to control for unobserved heterogeneous area characteristics. The findings suggest that state minimum wage increases deter new establishments from locating in an area, particularly in industries that rely on low-education workforces, such as the retail and manufacturing industries. However, existing establishments, regardless of industry type, are not found to be adversely affected by minimum wage policy." (Author's abstract, IAB-Doku) ((en))

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Schulten, Thorsten (2011): WSI-Mindestlohnbericht 2011. Mindestlöhne unter Krisendruck. In: WSI-Mitteilungen, Jg. 64, H. 3, S. 131-137. DOI:10.5771/0342-300X-2011-3-131

Abstract

"Der WSI-Mindestlohnbericht 2011 gibt einen Überblick über die derzeitige Mindestlohnpolitik in Europa sowie in ausgewählten außereuropäischen Staaten. Unter Auswertung der WSI-Mindestlohndatenbank werden aktuelle Daten zur Höhe und Entwicklung gesetzlicher Mindestlöhne präsentiert. Die Mindestlohnpolitik des Jahres 2010 stand nach wie vor unter dem Vorzeichen der Krise. Zwar kam es in der Mehrzahl der Länder zu einer nominalen Erhöhung der Mindestlohnsätze, diese fiel jedoch zumeist eher moderat aus und blieb in einigen Fällen sogar hinter der Preisentwicklung zurück. Die eher bescheidene Mindestlohnbilanz des Jahres 2010 ist Ausdruck eines wachsenden politischen Drucks von Arbeitgebern und Regierungen, die darauf abzielen, das bestehende Mindestlohnniveau möglichst gering zu halten." (Autorenreferat, IAB-Doku)

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Sen, Anindya, Kathleen Rybczynski & Corey Van De Waal (2011): Teen employment, poverty, and the minimum wage. Evidence from Canada. In: Labour economics, Jg. 18, H. 1, S. 36-47. DOI:10.1016/j.labeco.2010.06.003

Abstract

"In May 2007, the U.S. Congress enacted legislation, which increased the Federal minimum hourly wage from $5.15 to $7.25, over a two year time period. This increase to the minimum wage was the first in nearly a decade and was approved with the objective of alleviating poverty among low-income households. However, a higher minimum wage may result in more unemployment and poverty. We exploit time-series variation in minimum wages set by Canadian provinces between 1981 and 2004. OLS and IV results suggest that a 10% increase in the minimum wage is significantly correlated with a 3% - 5% drop in teen employment. Further, a 10% rise in the minimum wage is also significantly associated with a 4% - 6% increase in the percentage of families living under Low Income Cut Offs (LICOs). Difference-in-difference estimates from the 1993, 1995, and 1998 waves of the Survey of Consumer Finances (SCF) support these findings as they suggest that income earned by teens constitutes a non-trivial portion of household income for families beneath Low Income Cut Offs. Therefore, a higher minimum wage may paradoxically result in a significant negative shock to household income among low-income families." (Author's abstract, IAB-Doku) ((en))

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Shannon, Michael (2011): The employment effects of lower minimum wage rates for young workers. Canadian evidence. In: Industrial relations, Jg. 50, H. 4, S. 629-655. DOI:10.1111/j.1468-232X.2011.00655.x

Abstract

"Between 1986 and 1998, six of the ten Canadian provinces abolished their lower minimum wage rates for younger teenage workers. Using data from the Canadian Labour Force Survey, this paper evaluates the effects of abolition on the employment and weekly hours worked of 15- to 16-year-olds using teenagers in provinces where there is no legislative change and young people above the age to which youth rates applied as control groups. The results provide some evidence that abolishing these youth rates significantly lowered employment and work hours of 15- to 16-year-olds, but the lack of evidence for some jurisdictions and patterns of effects using age controls do raise some questions regarding the interpretation of the results." (Author's abstract, IAB-Doku) ((en))

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Tamada, Keiko (2011): Analysis of the determinants of minimum wages in Japan. In: Japan labor review, Jg. 8, H. 2, S. 24-41.

Abstract

"This paper overviews Japan's minimum wage system and examines the determinants of 'guideline increases (meyasu-gaku),' which are the increases in minimum wages recommended by the central council, and the actual minimum wage increases set by the regional councils. In Japan, minimum wages are deliberated upon mainly by advisory councils. The central council recommends the guideline increases and the regional councils set the actual increases. Our analysis found that the guideline increases are positively affected by the wage growth rates. Comments by public interest at meetings of the central council have suggested that their decisions on the guideline increases are influenced by the wage growth rate, and our estimation results also support the hypothesis that the guideline increases are positively affected by the wage growth rate. Because the council comprises workers represented by union officials, we examined the possible Impact of the unionization rate on the guideline increases. We found that the guideline increase is not affected by the unionization rate. Our analysis indicated that the actual minimum wage increases are set close to the guideline increases. We also found that the actual increase is positively affected by the active job openings-to-applicants ratio. As with the guideline increases, however, our analysis showed that the actual increase is not affected by the unionization rate. In addition, we found that in 2007 and 2008, when the guideline increases were determined in light of the debates conducted by the Roundtable to Promote Strategy to Enhance Growth Potential (seicho-ryoku sokoage senryaku suisin entaku kaigi) which set a policy direction toward minimum wage increases, the actual increases were larger than those in other years." (Author's abstract, IAB-Doku) ((en))

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Tonin, Mirco (2011): Minimum wage and tax evasion. Theory and evidence. In: Journal of Public Economics, Jg. 95, H. 11/12, S. 1635-1651.

Abstract

"This paper examines the interaction between minimum wage legislation and tax evasion by employed labor. I develop a model in which firms and workers may agree to report less than the true amount of earnings to the fiscal authorities. I show that introducing a minimum wage creates a spike in the distribution of declared earnings and induces higher compliance by some agents, thus reducing their disposable income. The comparison of food consumption and of the consumption-income gap before and after the massive minimum wage hike that took place in Hungary in 2001 reveals that households who appeared to benefit from the hike actually experienced a drop compared to similar but unaffected households, thus supporting the prediction of the theory." (Author's abstract, IAB-Doku) ((en))

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Tonin, Mirco (2011): Underreporting of earnings and the minimum wage spike. (IZA discussion paper 5942), Bonn, 16 S.

Abstract

"This paper documents a positive correlation within European labour markets between the proportion of full-time employees with earnings on the minimum wage and the extent of underreporting of earnings in the economy. Using a simple model of a competitive labour market, I show how this correlation can emerge as a result of the common dependence of both quantities on the strength of enforcement of fiscal regulation. This suggests that a high spike in the wage distribution at the minimum wage level is, in some contexts, an issue of fiscal enforcement, more than a labour market issue." (Author's abstract, IAB-Doku) ((en))

Abstract

"The economic crisis presented considerable challenges to industrial relations across the EU. This report reviews trends and developments in the relationships between workers, employers, their respective representatives and public authorities during 2008-10. It begins with an overview of the main characteristics of industrial relations institutions before analysing the strategies and perspectives of social partners and social dialogue developments in the face of the crisis. The report then examines wage bargaining, wage flexibility and minimum wages as well as the implications for industrial relations of the transition to a low-carbon economy. Finally, the report gives an overview of EU-level social dialogue and legislative developments" (Author's abstract, IAB-Doku) ((en))

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Addison, John T. & Orgul Demet Ozturk (2010): Minimum wages, labor market institutions, and female employment and unemployment. A cross-country analysis. (IZA discussion paper 5162), Bonn, 32 S.

Abstract

"This paper estimates the effect of minimum wage regulation in 16 OECD countries, 1970-2008. Our treatment is motivated by Neumark and Wascher's (2004) seminal cross-country study using panel methods to estimate minimum wage effects among teenagers and young adults. Apart from the longer time interval examined here, a major departure of the present study is the focus on prime-age females, a group typically neglected in the component minimum wage literature. Another is our deployment of time-varying policy and institutional regressors. Yet another is our examination of unemployment and participation outcomes in addition to employment effects. We report strong evidence of adverse employment effects among adult females and lower participation, even if the unemployment effects are muted. Although we report some similar findings to Neumark and Wascher as to the role of labor market institutions and policies, we do not observe the same patterns in the institutional data; in particular, we can reject for our target group their finding of stronger disemployment effects in countries with the least regulated markets." (Author's abstract, IAB-Doku) ((en))

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Autor, David H., Alan Manning & Christopher L. Smith (2010): The contribution of the minimum wage to U.S. wage inequality over three decades. A reassessment. (NBER working paper 16533), Cambridge, Mass., 68 S. DOI:10.3386/w16533

Abstract

"We reassess the effect of state and federal minimum wages on U.S. earnings inequality, attending to two issues that appear to bias earlier work: violation of the assumed independence of state wage levels and state wage dispersion, and errors-in-variables that inflate impact estimates via an analogue of the well known division bias problem. We find that erosion of the real minimum wage raises inequality in the lower tail of the wage distribution (the 50/10 wage ratio), but the impacts are typically less than half as large as those reported in the literature and are almost negligible for males. Nevertheless, the estimated effects of the minimum wage on points of the wage distribution extend to wage percentiles where the minimum is nominally non-binding, implying spillovers. We structurally estimate these spillovers and show that their relative importance grows as the nominal minimum wage becomes less binding. Subsequent analysis underscores, however, that spillovers and measurement error (absent spillovers) have similar implications for the effect of the minimum on the shape of the lower tail of the measured wage distribution. With available precision, we cannot reject the hypothesis that estimated spillovers to non-binding percentiles are due to reporting artifacts. Accepting this null, the implied effect of the minimum wage on the actual wage distribution is smaller than the effect of the minimum wage on the measured wage distribution." (Author's abstract, IAB-Doku) ((en))

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Autor, David H., Alan Manning & Christopher L. Smith (2010): The contribution of the minimum wage to U.S. wage inequality over three decades. A reassessment. (CEP discussion paper 1025), London, 70 S.

Abstract

"We reassess the effect of state and federal minimum wages on U.S. earnings inequality, attending to two issues that appear to bias earlier work: violation of the assumed independence of state wage levels and state wage dispersion, and errors-in-variables that inflate impact estimates via an analogue of the well known division bias problem. We find that erosion of the real minimum wage raises inequality in the lower tail of the wage distribution (the 50/10 wage ratio), but the impacts are typically less than half as large as those reported in the literature and are almost negligible for males. Nevertheless, the estimated effects of the minimum wage on points of the wage distribution extend to wage percentiles where the minimum is nominally non-binding, implying spillovers. We structurally estimate these spillovers and show that their relative importance grows as the nominal minimum wage becomes less binding. Subsequent analysis underscores, however, that spillovers and measurement error (absent spillovers) have similar implications for the effect of the minimum on the shape of the lower tail of the measured wage distribution. With available precision, we cannot reject the hypothesis that estimated spillovers to non-binding percentiles are due to reporting artifacts. Accepting this null, the implied effect of the minimum wage on the actual wage distribution is smaller than the effect of the minimum wage on the measured wage distribution." (Author's abstract, IAB-Doku) ((en))

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Avouyi-Dovi, Sanvi, Denis Fougère & Erwan Gautier (2010): Wage rigidity, collective bargaining and the minimum wage. Evidence from French agreement data. (CEPR discussion paper 7932), London, 48 S.

Abstract

"Using several unique data sets on wage agreements at both the firm- and the industry-levels in France, we examine the impact of typical European wage-setting institutions on the form and the degree of wage rigidity. We highlight different stylized facts concerning wage stickiness. First, in France, the typical duration of a wage agreement is one year. Consequently, a Taylor (1980) -type model appears to reproduce appropriately the distribution of agreement durations. Some 30 percent of settlements stipulate several predetermined wage changes during the year following the date of signature of the agreement. The frequency of wage agreements is highly seasonal, but the dates at which agreements take effect are more staggered. The date at which the national minimum wage level is revised each year has a significant impact on the timetable of wage agreements, both at the firm- and at the industry-levels. Wage increases negotiated at these two levels mainly depend on the inflation regime, the firm profitability and the proportion of minimum-wage workers in the same industry." (Author's abstract, IAB-Doku) ((en))

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Basu, Arnab K., Nancy H. Chau & Ravi Kanbur (2010): Turning a blind eye: Costly enforcement, credible commitment and minimum wage laws. In: The economic journal, Jg. 120, H. 543, S. 244-269. DOI:10.1111/j.1468-0297.2009.02298.x

Abstract

"In many countries, non-compliance with minimum wage legislation is widespread and authorities may be seen as having turned a blind eye to legislation they have themselves passed. We show that turning a blind eye can indeed be an equilibrium phenomenon with ex post credibility, in a model of minimum wage policy with imperfect competition, imperfect enforcement and imperfect commitment. Since credible enforcement requires costly ex post transfer of income from employers to workers, a government concerned only with efficiency but not with distribution is shown, paradoxically, to be unable to credibly elicit efficiency improvements via a minimum wage reform." (Author's abstract, IAB-Doku) ((en))

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Belman, Dale L. & Paul Wolfson (2010): The effect of legislated minimum wage increases on employment and hours. A dynamic analysis. In: Labour, Jg. 24, H. 1, S. 1-25. DOI:10.1111/j.1467-9914.2010.00468.x

Abstract

"We present a dynamic policy simulation analysing what would have happened to wages, employment, and total hours had the federal minimum wage increased in September 1998, a year after the last actual increase in our data. Prior work suggests that employment responses take 6 years to play out. Using a time-series model for 23 low-wage industries, we find a positive response of average wages over 54 months following an increase in the minimum wage, but neither employment nor hours can be distinguished from random noise. Ignoring confidence intervals, the adjustment of hours is complete after 1 year, the adjustment of employment after no more than two and one half years." (Author's abstract, IAB-Doku) ((en))

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Boockmann, Bernhard (2010): The combined employment effects of minimum wages and labor market regulation. A meta-analysis. (IZA discussion paper 4983), Bonn, 30 S.

Abstract

"This paper provides a meta-analysis of 55 empirical studies estimating the employment effects of minimum wages in 15 industrial countries. It strongly confirms the notion that the effects of minimum wages are heterogeneous between countries. As possible sources of heterogeneity, it considers the benefit replacement ratio, employment protection and the collective bargaining system. While the results are in line with theoretical expectations, the degree to which they are robust differs across these institutions." (Author's abstract, IAB-Doku) ((en))

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Boockmann, Bernhard (2010): The combined employment effects of minimum wages and labor market regulation. A meta-analysis. (IAW-Diskussionspapiere 65), Tübingen, 35 S.

Abstract

"This paper provides a meta-analysis of 55 empirical studies estimating the employment effects of minimum wages in 15 industrial countries. It strongly confirms the notion that the effects of minimum wages are heterogeneous between countries. As possible sources of heterogeneity, it considers the benefit replacement ratio, employment protection and the collective bargaining system. While the results are in line with theoretical expectations, the degree to which they are robust differs across these institutions." (Author's abstract, IAB-Doku) ((en))

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Bosch, Gerhard (2010): Beschäftigung und Mindestlöhne. Neue Ergebnisse der empirischen Mindestlohnforschung. In: WSI-Mitteilungen, Jg. 63, H. 8, S. 404-411. DOI:10.5771/0342-300X-2010-8-404

Abstract

"Unter Bezug vor allem auf die neoklassische Arbeitsmarkttheorie zeigt der Beitrag zunächst, dass sich aus theoretischen Modellen keine eindeutigen Aussagen über die Beschäftigungswirkungen von Mindestlöhnen ableiten lassen. Ergiebiger ist die neue empirische Mindestlohnforschung. Sie macht deutlich, dass nicht nur sehr niedrige Mindestlöhne, wie sie in vielen US-Staaten gezahlt werden, beschäftigungsneutral sind, sondern auch höhere Mindestlöhne, die es in einigen westeuropäischen Staaten, aber auch in Form der 'living wages' in den USA gibt. Weiterhin können Mindestlöhne die Geschäftsmodelle von Unternehmen nachhaltig beeinflussen. Indem sie die im Niedriglohnbereich oft sehr hohe Fluktuation verringern, werden für Unternehmen Investitionen in Weiterbildung und erweiterte Aufgabenzuschnitte lohnend. Gleichzeitig sinkt der Kontrollaufwand bei Beschäftigten, die besser motiviert sind und eigenständiger arbeiten. Durch Mindestlöhne können die Extraprofite der vielfach monopsonistischen Arbeitsmarktstrukturen in Niedriglohnbereichen abgebaut und marktgerechte Löhne gesichert werden. Länder mit einem institutionellen Umfeld, das Weiterbildung, Modernisierung der Arbeitsorganisation und Innovation unterstützt, können sich höhere Mindestlöhne 'leisten' als Länder ohne solche positiven Rückkoppelungen." (Autorenreferat, IAB-Doku)

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Dockery, Alfred Michael, Richard Seymour & Rachel Ong (2010): Life on the minimum wage in Australia. An empirical investigation. In: Australian Journal of Labour Economics, Jg. 13, H. 1, S. 1-26.

Abstract

"From 2006 to 2009, Federal minimum wages in Australia were set by the Australian Fair Pay Commission. This paper uses data from the Household, Income and Labour Dynamics in Australia panel survey to investigate the circumstances of persons who are paid at or near the minimum wage, and thus potentially affected by the wage determinations. Net disposable incomes for actual and potential minimum wage workers are modelled in and out of work to investigate the implications of the wage determinations on work incentives. In addition, a range of measures of socioeconomic status and wellbeing are inspected. Comparisons are made with selected groups of non-employed persons and those with higher earnings to highlight the potential costs and benefits for affected individuals, and hence the potential trade-offs faced in setting minimum wages if we accept that increases in minimum wages reduce employment opportunities." (Author's abstract, IAB-Doku) ((en))

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Dolton, Peter, Chiara Rosazza-Bondibene & Jonathan Wadsworth (2010): Employment, inequality and the UK National Minimum Wage over the medium-term. (CEP discussion paper 1007), London, 33 S.

Abstract

"This paper assesses the impact of the National Minimum Wage (NMW) on employment and inequality in the UK over the decade since its introduction in 1999. Identification is facilitated by using variation in the bite of the NMW across local labour markets and the different sized year on year up ratings of the NMW. We use an 'incremental differences-in-differences' (IDiD) estimator which allows us to estimate the effects of the NMW in each year since its introduction. We find that an increased bite of the NMW is associated with falls in lower tail wage inequality. Moreover, while the average employment effect of the NMW over the entire period is broadly neutral, there are small but significant positive employment estimates from 2003 onward, when the average bite of the NMW was at its highest since its introduction." (Author's abstract, IAB-Doku) ((en))

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Dube, Arindrajit, T. William Lester & Michael Reich (2010): Minimum wage effects across state borders. Estimates using contiguous counties. In: The Review of Economics and Statistics, Jg. 92, H. 4, S. 945-964.

Abstract

"We use policy discontinuities at state borders to identify the effects of minimum wages on earnings and employment in restaurants and other low-wage sectors. Our approach generalizes the case study method by considering all local differences in minimum wage policies between 1990 and 2006. We compare all contiguous county-pairs in the United States that straddle a state border and find no adverse employment effects. We show that traditional approaches that do not account for local economic conditions tend to produce spurious negative effects due to spatial heterogeneities in employment trends that are unrelated to minimum wage policies. Our findings are robust to allowing for long-term effects of minimum wage changes." (Author's abstract, IAB-Doku) ((en))

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Hoffmann, Nick (2010): Die Höhe der gesetzlichen Mindestlöhne in Europa 2010. In: Ifo-Schnelldienst, Jg. 63, H. 2, S. 38-39.

Abstract

"Während es in Deutschland bislang nur verbindliche Mindestlöhne für einzelne Branchen und Berufe gibt, existiert in 22 der 27 EU-Mitgliedsländer zum 1. Januar 2010 ein branchenübergreifender gesetzlicher Mindestlohn. Die Höhe der gesetzlichen Mindestlöhne in der Europäischen Union beträgt bei einer 40-Stunden-Woche 122 EURO pro Monat in Bulgarien und geht bis zu monatlich 1 641 EURO in Luxemburg." (Autorenreferat, IAB-Doku)

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Kahn, Lawrence M. (2010): Labor market policy. A comparative view on the costs and benefits of labor market flexibility. (IZA discussion paper 5100), Bonn, 36 S.

Abstract

"I review theories and evidence on wage-setting institutions and labor market policies in an international comparative context. These include collective bargaining, minimum wages, employment protection laws, unemployment insurance (UI), mandated parental leave, and active labor market policies (ALMPs). Since it is unlikely that an unregulated private sector would provide the income insurance these institutions do, these policies may enhance economic efficiency. However, to the extent that unemployment or resource misallocation results from such measures, these efficiency gains may be offset. Overall, Scandinavia and Central Europe follow distinctively more interventionist policies than the English speaking countries in the Northern Hemisphere. Possible explanations for such differences include vulnerability to external market forces and ethnic homogeneity. I then review evidence on the impacts of these policies and institutions. While the interventionist model appears to cause lower levels of wage inequality and high levels of job security to incumbent workers, it also in some cases leads to the relegation of new entrants (disproportionately women, youth and immigrants) as well as the less skilled to temporary jobs or unemployment. Making labor markets more flexible could bring these groups into the regular labor market to a greater extent, at the expense of higher levels of economic insecurity for incumbents and higher levels of wage inequality. The Danish model of loosening employment protections while providing relatively generous UI benefits with strict job search requirements holds out the possibility of reducing barriers for new entrants and the less skilled while maintaining some level of income insurance." (Author's abstract, IAB-Doku) ((en))

Zitatform

Kahn, Lawrence M. (2010): Labor market policy. A comparative view on the costs and benefits of labor market flexibility. (CESifo working paper 3140), München, 39 S.

Abstract

"I review theories and evidence on wage-setting institutions and labor market policies in an international comparative context. These include collective bargaining, minimum wages, employment protection laws, unemployment insurance (UI), mandated parental leave, and active labor market policies (ALMPs). Since it is unlikely that an unregulated private sector would provide the income insurance these institutions do, these policies may enhance economic efficiency. However, to the extent that unemployment or resource misallocation results from such measures, these efficiency gains may be offset. Overall, Scandinavia and Central Europe follow distinctively more interventionist policies than the English speaking countries in the Northern Hemisphere. Possible explanations for such differences include vulnerability to external market forces and ethnic homogeneity. I then review evidence on the impacts of these policies and institutions. While the interventionist model appears to cause lower levels of wage inequality and high levels of job security to incumbent workers, it also in some cases leads to the relegation of new entrants (disproportionately women, youth and immigrants) as well as the less skilled to temporary jobs or unemployment. Making labor markets more flexible could bring these groups into the regular labor market to a greater extent, at the expense of higher levels of economic insecurity for incumbents and higher levels of wage inequality. The Danish model of loosening employment protections while providing relatively generous UI benefits with strict job search requirements holds out the possibility of reducing barriers for new entrants and the less skilled while maintaining some level of income insurance." (Author's abstract, IAB-Doku) ((en))

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Langevin, Manon (2010): Minimum wage. In: Perspectives on Labour and Income, Jg. 11, H. 3, S. 14-22.

Abstract

"All provinces and territories set minimum wages in their employment standards legislation. This update uses the Labour Force Survey to examine the characteristics of those who work at or below the minimum wage for experienced adults in each jurisdiction. The incidence of working for minimum wage has increased each year since 2006 but remains concentrated among youth, particularly young women." (Author's abstract, IAB-Doku) ((en))

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Maloney, Tim & Gail Pacheco (2010): Interpreting changes in minimum wage incidence rates. In: Australian Journal of Labour Economics, Jg. 13, H. 3, S. 219-240.

Abstract

"Statutory minimum wages increased substantially in New Zealand between 2000 and 2008. Where less than three per cent of workers were being paid the minimum wage in the late 1990s, this figure increased to more than ten per cent of workers by 2008. However, it is not obvious how this rise in the minimum wage incidence rate should be interpreted. The problem is that minimum wages can have behavioural effects. A higher wage floor could reduce the proportion of minimum wage workers in an economy by eliminating low-wage jobs. Recent New Zealand experience provides a unique opportunity for estimating this behavioural impact. The substantial gap between adult and teenage minimum wages was eliminated immediately in 2001 for 18 and 19 year-olds and gradually by 2008 for 16 and 17 year-olds. We find little evidence of an overall behavioural effect. Increases in incidence rates were not diminished by losses in low-wage employment. However, we find compelling evidence that minimum wage incidence for an age group is reduced by increases in minimum wages for neighbouring age groups." (Author's abstract, IAB-Doku) ((en))

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Owens, Mark F. & John H. Kagel (2010): Minimum wage restrictions and employee effort in incomplete labor markets. An experimental investigation. In: Journal of Economic Behavior and Organization, Jg. 73, H. 3, S. 317-326. DOI:10.1016/j.jebo.2009.12.002

Abstract

"A minimum wage raises average wages along with modest increases in employees' average effort levels, generating a Pareto improvement in social welfare. The minimum wage reduces effort in the neighborhood of the minimum, but has no systematic effect on effort levels at higher wages. As a consequence average effort increases modestly with a minimum wage as it raises average wages. Similar results are reported within groups, both when introducing and eliminating a minimum wage, although the within group effects of introducing a minimum wage are stronger than dropping it." (Author's abstract, IAB-Doku) ((en))

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Pinoli, Sara (2010): Rational expectations and the puzzling no-effect of the minimum wage. (IZA discussion paper 4933), Bonn, 58 S.

Abstract

"This paper argues that expectations are an important element that needs to be included into the analysis of the effects of the minimum wage on employment. We show in a standard matching model that the observed employment effect is higher the lower is the likelihood associated with the minimum wage variation. On the other side, there is a significant anticipation effect, ignored in the literature. This property is able to explain the controversial results found in the empirical studies. When the policy is anticipated, the effect at the time of the actual variation is small and potentially hard to identify. The model is tested on Spanish data, taking advantage of the unexpected change in the minimum wage following the election of Zapatero in 2004." (Author's abstract, IAB-Doku) ((en))

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Ropponen, Olli (2010): Minimum wages and employment. Replication of Card and Krueger (1994) using the CIC estimator. (Helsinki Center of Economic Research. Discussion paper 289), Helsinki, 17 S.

Abstract

"We employ the original Card and Krueger (1994) data and the CIC estimator to reexamine the evidence on the effect of minimum wages on employment. Our main finding is that the controversial result remains valid only for small fast-food restaurants. This finding is accompanied with a new possible explanation." (Author's abstract, IAB-Doku) ((en))

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Sabia, Joseph J. & Richard V. Burkhauser (2010): Minimum wages and poverty: will a $9.50 federal minimum wage really help the working poor? In: Southern Economic Journal, Jg. 76, H. 3, S. 592-623.

Abstract

"Using data drawn from the March Current Population Survey, we find that state and federal minimum wage increases between 2003 and 2007 had no effect on state poverty rates. When we then simulate the effects of a proposed federal minimum wage increase from $7.25 to $9.50 per hour, we find that such an increase will be even more poorly targeted to the working poor than was the last federal increase from $5.15 to $7.25 per hour. Assuming no negative employment effects, only 11.3% of workers who will gain live in poor households, compared to 15.8% from the last increase. When we allow for negative employment effects, we find that the working poor face a disproportionate share of the job losses. Our results suggest that raising the federal minimum wage continues to be an inadequate way to help the working poor." (Author's abstract, IAB-Doku) ((en))

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Schulten, Thorsten (2010): WSI-Mindestlohnbericht 2010. Unterschiedliche Strategien in der Krise. In: WSI-Mitteilungen, Jg. 63, H. 3, S. 152-160. DOI:10.5771/0342-300X-2010-3-152

Abstract

"Der WSI Mindestlohnbericht 2010 gibt einen Überblick über die aktuelle Mindestlohnpolitik in Europa und ausgewählten außereuropäischen Staaten. Unter Auswertung der WSI-Mindestlohndatenbank werden aktuelle Daten zur Höhe und Entwicklung gesetzlicher Mindestlöhne präsentiert. Es zeigt sich, dass unter den Bedingungen der Krise die einzelnen Staaten sehr unterschiedliche Strategien verfolgen. Während in vielen Ländern die Mindestlöhne eingefroren wurden, kam es in anderen Ländern zu kräftigen Mindestlohnzuwächsen. Als Instrument zur Bekämpfung der Krise können Mindestlöhne einen wichtigen Beitrag zur Stabilisierung der privaten Nachfrage und zur Vermeidung deflationärer Tendenzen leisten." (Autorenreferat, IAB-Doku)

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Masso, Jaan, Thomas Moutos, Gerhard Bosch, Danijel Nestic, Eugenia Fotoniata, Brian Nolan, Damian Grimshaw, Wiemer Salverda, János Köllö, Per Skedinger, Thomas Kalina, Kerly Krillo, Jerome Gautie, Seyhan Erdogdu, Jacek Wallusch & Vassil Tzanov (2010): The minimum wage revisited in the enlarged EU. Genf: International Labour Office, 544 S. DOI:10.4337/9781781000571

Abstract

"This book provides in-depth and innovative analysis of the minimum wage in Europe, looking at its scope within the enlarged EU and posing the question of harmonization between the minimum wages of the individual Member States - or even a common EU minimum wage. It also explores the role of the minimum wage at the national level, looking at trends and effects, with case studies on specific national policy issues or industrial sectors. Minimum wage fixing has returned quite prominently to the core of policy debates, as illustrated by the adoption of a statutory minimum wage by Austria, Ireland and the United Kingdom, and the ongoing discussions in Germany and Sweden. Proposals to have common rules at EU level have also multiplied since EU enlargement, in particular to minimize 'social dumping'. Bringing together 15 national studies from noted European specialists in the field, this timely collection aims to stimulate the current debate." (Author's abstract, IAB-Doku) ((en))

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Watts, Martin J. (2010): How should minimum wages be set in Australia? In: The Journal of Industrial Relations, Jg. 52, H. 2, S. 131-149. DOI:10.1177/0022185609359441

Abstract

"Two recurring themes in submissions by industry groups and the Coalition Government to Safety Net Cases administered by both the Australian Industrial Relations Commission and the Australian Fair Pay Commission, as well as in decisions by both Commissions, have been that (1) an improvement in the tax/transfer arrangements for the low paid is a partial substitute for minimum wage increases; and (2) the family circumstances of low wage recipients should influence the degree of minimum wage adjustment. In this paper it is argued that conflation of the wage and tax/transfer systems introduces major contradictions into the principles of minimum wage adjustment, and that reliance on the tax/transfer system leads to adverse economic and social consequences. A simple rule for minimum wage adjustment is advocated, with the minimum wage level also being periodically recalibrated to enable the ongoing social inclusion of its recipients. Finally, in the international literature, the macroeconomic consequences of modest minimum wage adjustment remain contested, but this debate becomes largely irrelevant if the Federal Government renews its commitment to full employment through a Job Guarantee. Then the minimum wage also becomes the nominal anchor of the wage and price system." (Author's abstract, IAB-Doku) ((en))

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Böckerman, Petri & Roope Uusitalo (2009): Minimum wages and youth employment. Evidence from the Finnish retail trade sector. In: BJIR, Jg. 47, H. 2, S. 388-405. DOI:10.1111/j.1467-8543.2009.00720.x

Abstract

"Following an agreement between the trade unions and the employer organizations in 1993, Finnish employers could temporarily pay less than the existing minimum wage for young workers. We examine the effects of these minimum wage exceptions by comparing the changes in wages and employment of the groups whose minimum wages were reduced with simultaneous changes among slightly older workers for whom the minimum wages remained unchanged. Our analysis is based on payroll record data and minimum wage agreements from the retail trade sector. The results show that average wages in the eligible group declined only modestly. We find no significant effects on employment." (Author's abstract, Published by arrangement with John Wiley & Sons) ((en))

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Crofton, Stephanie O., William L. Anderson & Emily C. Rawe (2009): Do higher real minimum wages lead to more high school dropouts? Evidence from Maryland across races, 1993-2004. In: The American Journal of Economics and Sociology, Jg. 68, H. 2, S. 445-464. DOI:10.1111/j.1536-7150.2009.00632.x

Abstract

"We explore whether higher levels of the real minimum wage have differing effects on high school dropout rates across students of various races and ethnicities (whites, African Americans, Hispanics, and Asians). Using a panel of data across Maryland counties and annual observations in 1993 - 2004, we found higher real minimum wages to be associated with higher dropout rates for Hispanic students, but not for other races and ethnicities. We used a variety of model specifications and explanatory variables, including real income, the unemployment rate, teen pregnancy rates, and educational attainment among adults. Several of our findings are broadly consistent with commonly reported sociological observations regarding how behavioral choices may be affected by different levels across races and ethnicities of cultural integration of recent immigrants, family cohesiveness, the value placed on education, small business ownership, and hourly (vs. salaried) employment." (Author's abstract, Published by arrangement with John Wiley & Sons) ((en))

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Kabakci, Mahmut (2009): Gesetzlicher Mindestlohn im türkischen Arbeitsrecht. In: Zeitschrift für ausländisches und internationales Arbeits- und Sozialrecht, Jg. 23, H. 2, S. 140-150.

Abstract

"Für die Implementierung eines Mindestlohns gibt es innerhalb und außerhalb der Türkei zwei grundlegende Wege: Zum einen die Aufnahme eines solchen Mindestlohns in allgemein-verbindliche Tarifverträge und zum anderen der Beschluss eines gesetzlichen Mindestlohns. Grundsätzlich ist ein Tarifvertrag als Instrument staatsfreier Preisbildung am Arbeitsmarkt der mit Abstand wichtigste Ordnungsfaktor des Arbeitsrechts. Dennoch bieten Tarifverträge in der türkischen Praxis den Arbeitnehmern keine echten Garantien. In der Türkei kommt einzig und allein dem Arbeitsgesetz4 (ArbG) eine wirkliche Garantiefunktion zu - so auch für Mindestlohn. Seit dem Inkrafttreten des ersten türkischen Arbeitsgesetzes in 1936 ist ein gesetzlicher Mindestlohn fest im Gesetz verankert." (Autorenreferat, IAB-Doku)

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Neumark, David & William Wascher (2002): Do minimum wages fight poverty? In: Economic Inquiry, Jg. 40, H. 3, S. 315-333. DOI:10.1093/ei/40.3.315

Abstract

"We present evidence on the effects of minimum wages on family incomes. The results indicate that minimum wages increase both the probability that poor families escape poverty and the probability that previously nonpoor families fall into poverty. The estimated increase in the flow into poverty is larger, although this difference is not statistically significant. We also find that minimum wages tend to boost the incomes of poor families that remain below the poverty line. On net, the various trade-offs created by minimum wage increases more closely resemble income redistribution among low-income families than income redistribution from high- to low-income families." (Author's abstract, Published by arrangement with John Wiley & Sons) ((en))

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Card, David & Alan B. Krueger (2000): Minimum Wages and Employment. A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania : Reply. In: The American economic review, Jg. 90, H. 5, S. 1397-1420. DOI:10.1257/aer.90.5.1397

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Belman, Dale & Paul Wolfson (1999): Its bark is worse than its bite. The wage and employment effects of the minimum wage in the US. In: Australian economic papers, Jg. 38, H. 2, S. 143-163. DOI:10.1111/1467-8454.00048

Abstract

"This study examines the effect of changes in the US minimum wage on wages and employment in 32 industries selected for their presumed sensitivity to the minimum wage. Applying time series techniques commonly used in macroeconomics and finance to changes in the minimum wage occurring from 1967 and 1991, we initially test for a wage response; only where one is found do we test for an employment response. Twenty-five per cent of the industry/minimum-wage-increase pairs show evidence of an appropriate wage response. Eight of these 54 show a statistically significant negative employment response, while six show significant, positive employment responses. Positive effects may be due to either a high variance distribution centred on zero or markets with 'lemons' problems concerning worker quality. Limiting analysis to industries in which the minimum wage binds provides no evidence of a consistent negative relationship between the historical minimum wage and employment." (Author's abstract, IAB-Doku) ((en))

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Card, David & Alan B. Krueger (1995): Time-Series Minimum-Wage Studies. A Meta-analysis. In: The American economic review, Jg. 85, H. 2, S. 238-243.

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Card, David & Alan B. Krueger (1994): Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania. In: The American economic review, Jg. 84, H. 4, S. 772-793.

Abstract

"On April 1, 1992, New Jersey's minimum wage rose from $4.25 to $5.05 per hour. To evaluate the impact of the law we surveyed 410 fast-food restaurants in New Jersey and eastern Pennsylvania before and after the rise. Comparisons of employment growth at stores in New Jersey and Pennsylvania (where the minimum wage was constant) provide simple estimates of the effect of the higher minimum wage. We also compare employment changes at stores in New Jersey that were initially paying high wages (above $5) to the changes at lower-wage stores. We find no indication that the rise in the minimum wage reduced employment." (Author's abstract, IAB-Doku) ((en))

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Card, David (1992): Using Regional Variation in Wages to Measure the Effects of the Federal Minimum Wage. In: Industrial and Labor Relations Review, Jg. 46, H. 1, S. 22-37. DOI:10.1177/001979399204600103

Abstract

"The imposition of a national minimum wage standard provides a natural experiment in which the "treatment effect" varies across states depending on the fraction of workers initially earning less than the new minimum. The author exploits this fact to evaluate the effect of the April 1990 increase in the federal minimum wage on teenagers' wages, employment, and school enrollment. Comparisons of grouped and individual state data confirm that the rise in the minimum wage increased teenagers' wages. There is no evidence of corresponding losses in teenage employment or changes in teenage school enrollment." (Author's abstract, IAB-Doku) ((en))

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Card, David (1992): Do Minimum Wages Reduce Employment? A Case Study of California, 1987-89. In: Industrial and Labor Relations Review, Jg. 46, H. 1, S. 38-54. DOI:10.1177/001979399204600104

Abstract

"In July 1988, California's minimum wage rose from $3.35 to $4.25. During the previous year, 11% of workers in the state and 50% of California teenagers had earned less than the new state minimum. Using published data and samples from the Current Population Survey, the author compares changes in the labor market outcomes of California workers to the corresponding changes in a group of states with no increase in the minimum wage. The minimum wage increase raised the earnings of low-wage workers by 5–10%. Contrary to conventional predictions, however, there was no decline in teenage employment, or any relative loss of jobs in retail trade." (Author's abstract, IAB-Doku) ((en))

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Katz, Lawrence F. & Alan B. Krueger (1992): The Effect of the Minimum Wage on the Fast-Food Industry. In: Industrial and Labor Relations Review, Jg. 46, H. 1, S. 6-21. DOI:10.1177/001979399204600102

Abstract

"Using a longitudinal survey of fast-food restaurants in Texas, the authors examine the impact of recent increases in the federal minimum wage on a low-wage labor market. Less than 5% of fast-food restaurants were using the new youth subminimum wage in July/August 1991, even though the vast majority paid a starting wage below the new hourly minimum wage immediately before it became effective. Although some restaurants increased wages beyond the level needed to comply with higher minimum wages in both 1990 and 1991, those federal minimum wage increases greatly compressed the distribution of starting wages in the Texas fast-food industry. Two findings at variance with conventional predictions are that (1) employment increased more in those firms likely to have been most affected by the 1991 minimum wage increase than in other firms and (2) price changes were unrelated to mandated wage changes." (Author's abstract, IAB-Doku) ((en))

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Stigler, George J. (1946): The economics of minimum wage legislation. In: The American Economic Review, Jg. 36, H. 3, S. 358-365.

Abstract

"The minimum wage provisions of the Fair Labor Standards act of 1938 have been repealed by inflation. Many voices are now taking up the cry for a higher minimum, say, of 60 to 75 cents per hour. Economists have not been very outspoken on this type of legislation. It is my fundamental thesis that they can and should be outspoken, and singularly agreed. 'The popular objective of minimum wage legislation - the elimination of extreme poverty - is not seriously debatable. The important questions are rather (1) Does such legislation diminish poverty? (2) Are there efficient alternatives? The answers are, if I am not mistaken, unusually definite for questions of economic policy. If this is so, these answers should be given. Some readers will probably know my answers already ('no' and 'yes,' respectively); it is distressing how often one can guess the answer given to an economic question merely by knowing who asks it. But my personal answers are unimportant; the arguments on which they rest, which are important, will be presented under four heads:
1. Effects of a legal minimum wage on the allocation of resources.
2. Effects on aggregate employment.
3. Effects on family income.
4. Alternative policies to combat poverty." (Author's abstract, IAB-Doku) ((en))