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Abbate, Nicolás & Bruno Jiménez (2026): Do minimum wage hikes lead to employment destruction? Evidence from a regression discontinuity design in Argentina. In: Journal of Development Economics, Jg. 178. DOI:10.1016/j.jdeveco.2025.103558

Abstract

"In this study, we examine the impact of eight minimum wage increases in Argentina during the early 21st century by analyzing administrative records of registered employment. Utilizing a regression discontinuity design, we compare job separation rates between a group affected by the minimum wage hikes and a control group slightly out of their legal scope. Our findings indicate that, overall, these minimum wage hikes had no significant impact on separation rates. However, the 2008 increase triggered a 4.8 percentage point (19%) decrease in separations, casting doubt on the disemployment effects of minimum wages. Overall, these findings suggest that during economic upswings, minimum wage increases may have little to no adverse impact on job destruction." (Author's abstract, IAB-Doku, © 2025 Elsevier B.V. All rights are reserved, including those for text and data mining, AI training, and similar technologies.) ((en))

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Albagli, Pinjas, Rui Costa & Stephen Machin (2026): Minimum wages and the nature of work. (CEP discussion paper / Centre for Economic Performance 2173), London, 79 S.

Abstract

"When minimum wage increases impose a cost shock on employers of low wage workers, there are a variety of ways in which firms can adjust. Rather than study the main focal point of much minimum wage research, possible labour demand adjustment, this paper considers a more understudied angle. It examines whether firms can offset the cost shock through changing non-wage aspects of work related to the nature of work. This includes altering employment composition in the workplace, the use of alternative work arrangements and redefining job contracts. Whether these alter in response to minimum wages is studied through the lens of the UK's 2016 National Living Wage (NLW) introduction. In terms of traditionally studied outcomes, the NLW boosted worker wages, but with no change in total employment. Instead, firms did indeed adjust operations through changes in employment composition and by altering employment contracts. These non-labour demand adjustments of employment relations show how employment stability can be maintained in response to minimum wages as employers can restructure work through within-firm job composition and contracts." (Author's abstract, IAB-Doku) ((en))

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Borgschulte, Mark, Heepyung Cho & Darren Lubotsky (2026): Immigrants at the Margin: Labor Market Effects of the Minimum Wage. (RF Berlin - CReAM Discussion Paper Series 2026,103), Berlin, 44 S.

Abstract

"We examine the differential effects of minimum wages on immigrant and native workers in the United States. We find that minimum wage increases lead to reduced hours of work among immigrants with no effect on their employment. The effects are concentrated among recently-arrived, likely-undocumented workers in high turnover industries. Native workers show no such response, even when examining native subgroups with similar characteristics to the most affected immigrants. We conclude that affected immigrant labor markets feature low-surplus, low-investment employment relationships with flexible hours, but they are embedded in labor markets where replacement is unusually costly." (Author's abstract, IAB-Doku) ((en))

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Carta, Francesca & Fabrizio Colonna (2026): Minimum income and household labour supply. In: International Tax and Public Finance, Jg. 33, H. 2, S. 514-547. DOI:10.1007/s10797-025-09918-4

Abstract

"This paper examines the impact of Guaranteed Minimum Income (GMI) schemes on work incentives at the household level. We show that these schemes create strategic complementarities between partners’ employment decisions. When one partner is non-employed or earns a low wage, the household is more likely to receive the benefit, which discourages the other partner from working to avoid losing the benefit. The disincentive to work does not instead apply to partners of high earners whose income exceeds the programme threshold. This leads the partners to coordinate their decisions so that both are non-employed. The negative impact of the GMI on labour supply is therefore more pronounced in economies with many single-earner households. Focusing on Italy, where the employment rate of married women is low and a relatively generous GMI programme was introduced in 2019, we use a structural labour supply model to estimate that the GMI would primarily reduce the employment rate of married men with non-working wives and increase the number of households in which neither partner works. Married women would be less affected due to the high employment rate of their husbands." (Author's abstract, IAB-Doku, © Springer-Verlag) ((en))

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Clemens, Jeffrey & Michael R. Strain (2026): The heterogeneous effects of large and small minimum wage changes on hours worked: Evidence using a partially pre-committed analysis plan. In: Economics Letters, Jg. 262. DOI:10.1016/j.econlet.2026.112852

Abstract

"We use a partially pre-committed estimation strategy to study the effects of minimum wage increases on hours worked. Analyzing CPS and ACS data from 2011–2019, we estimate that relatively large minimum wage increases reduced usual hours worked per week among individuals with low levels of experience and education by just under one hour per week during the decade prior to the onset of the Covid-19 pandemic, while the effects of smaller minimum wage increases are economically and statistically indistinguishable from zero. Because we follow the same pre-committed analysis plan as Clemens and Strain’s (forthcoming) analysis of employment, we can directly compare the resulting employment and hours elasticities. We find that these elasticities were very similar in our empirical context." (Author's abstract, IAB-Doku, © 2026 Elsevier B.V. All rights are reserved, including those for text and data mining, AI training, and similar technologies.) ((en))

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Davies, Michael, R. Jisung Park & Anna Stansbury (2026): Minimum Wages and Workplace Injuries. (Upjohn Institute working paper 428), Kalamazoo, Mich., 62 S., App. DOI:10.17848/wp26-428

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Frangioni, Tommaso & Stella Volturo (2026): Organising Changes: The Institutional Work Behind the Implementation of a Minimum Income Scheme. In: Social Policy and Administration, Jg. 60, H. 4, S. 596-605. DOI:10.1111/spol.70026

Abstract

"Policy implementation at the local level is often influenced by the interplay between institutional frameworks and the discretionary power of street-level bureaucrats. This study examines how local welfare agencies in two Italian regions have reacted to the introduction of the Reddito di Cittadinanza (RdC), the Italian minimum income scheme. Through qualitative research, including interviews with social workers and their managers, this study explores how local actors mediate national policies and navigate structural constraints in a rapidly changing context, adapting the measure and at the same time reorganising their working contexts. The findings show that the implementation of the RdC has led to significant organisational adaptations, including the emergence of informal coordination mechanisms and new forms of professional discretion. Whilst the policy was designed to standardise welfare practises, its practical application varies across local contexts, highlighting the tensions between national mandates and local agency. The findings underscore the pivotal role of street-level bureaucrats in shaping policy implementation, often serving as conduits for interpreting and adapting measures to align with local needs. This research contributes to the extant literature on policy implementation by demonstrating the value of an organisational perspective in understanding welfare policy processes, transcending the conventional divide between top-down and bottom-up approaches. The study's findings imply that a sustained investment in local capacities is important to ensure the efficacy of policy measures. Future welfare reforms could benefit from the insights of this case study by integrating local agency and professional expertise into social policy design." (Author's abstract, IAB-Doku, Published by arrangement with John Wiley & Sons) ((en))

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Giupponi, Giulia & Stephen Machin (2026): Company Wage Policy in a Low-Wage Labor Market. (CEPR discussion paper / Centre for Economic Policy Research 21345), London, 72 S.

Abstract

"We study how firms set wages for their employees when they can legally age-discriminate across workers. We exploit an age-specific minimum wage change in the UK, which raised the minimum applying to workers aged 25 and over, leaving unchanged the minima for younger workers. Using matched employer-employee data on a low-paying sector, we show large, positive wage spillovers on workers aged under 25, which arise within firms from company wage policy. Pay equity norms offer the most parsimonious explanation for the emergence of spillovers. The effects that we document also operate in other low-paying sectors of the UK labor market." (Author's abstract, IAB-Doku) ((en))

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Guillen Sanchez, Jorge, Jose Alberto Molina & Jose Ignacio Gimenez-Nadal (2026): Minimum Wage and Parental Childcare Time in the USA, 2019-2023. (MPRA paper / University Library of Munich 127777), München, 33 S.

Abstract

"Recent economic literature suggests that increases in the minimum wage can lead to parents spending more time in childcare through easing financial constraints such as the income effect. However, most evidence from past research does not analyse the disruptions of the COVID 19 pandemic. This research examines the impact of state-level minimum wage increases on parental childcare time in the United States during the mentioned period of 2019 to 2023. Through the use of microdata from the American Time Use Survey (ATUS), we analyse a sample of 4043 working age parents and find that, contrary to findings from the 2003 to 2019 period, there is no statistical-ly significant effect on childcare time across aggregate or subgroup specifications, including mothers, fathers and low education parents among others. This null result diverges from pre-2019 literature. We attribute this lack of significance to the unique structural rigidities of the post-pandemic labor market (2019–2023) and the erosion of real wages due to high inflation, which likely neutralized the behavioral incentives typically associated with wage floors." (Author's abstract, IAB-Doku) ((en))

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Hijzen, Alexander, Mateo Montenegro & Ana Sofia Pessoa (2026): Minimum Wages in a Dual Labor Market: Evidence from the 2019 Minimum-Wage Hike in Spain. In: Labour Economics, Jg. 98. DOI:10.1016/j.labeco.2025.102826

Abstract

"This paper provides an assessment of the 2019 minimum-wage hike in Spain, which increased the minimum wage by 22% and directly concerned 7% of dependent employees. We make use of two complementary approaches, one that follows incumbent workers over time and hence does not take account of any possible effects on new hires, and one that tracks employment in wage bins over time and takes account of both separations and new hires. The results are as follows. First, the minimum wage hike significantly increased the wages of directly affected workers, with small positive wage spillovers on workers with initial wages just about the new minimum wage. Second, the increase in wages comes at the expense of a reduction in low-wage employment. While employment increases just above the minimum wage, it is not sufficient to offset the decline in employment below it. Third, the reduction in employment is mainly driven by a reduction in hires of workers on open-ended contracts and to a smaller extent job losses among workers on fixed-term contracts." (Author's abstract, IAB-Doku, © 2025 Elsevier B.V. All rights are reserved, including those for text and data mining, AI training, and similar technologies.) ((en))

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Marchingiglio, Riccardo & Michael Poyker (2026): The Economics of Gender-Specific Minimum Wage Legislation. In: Journal of labor economics, Jg. 44, H. 3, S. 1009-1063. DOI:10.1086/733493

Abstract

"Using full count U.S. census data, we study the impact of early 20th-century state-industry-specific minimum wage laws that primarily targeted female employees. Our triple-difference estimates suggest a null impact of the minimum wage laws, potentially reflecting disemployment effects and the positive selection bias of the workers remaining in the labor force. When comparing county-industry Trends between counties straddling state borders, female employment is lower by around 3.1% in affected county-industry cells. We further investigate the implications for own-wage elasticity of labor demand as afunction of cross-industry concentration, the channels of substitution between men and women, and heterogeneity by marital status." (Author's abstract, IAB-Doku) ((en))

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Morlin, Guilherme Spinato, Marco Stamegna, David Cano Ortiz, Simone D’Alessandro & Pietro Guarnieri (2026): Tackling labor market inequalities through minimum and maximum wages. In: Economic Modelling, Jg. 157. DOI:10.1016/j.econmod.2026.107495

Abstract

"Income inequality in labor markets arises from both inadequate pay at the bottom and excessive remuneration at the top of the wage distribution. Statutory minimum wages have proven effective in addressing low wages and in-work poverty, yet many countries have not fully implemented them. Conversely, salary caps have received relatively little attention as instruments to limit top incomes. This paper examines the effects of introducing both minimum and maximum wages in Italy using Eurogreen, a macro-simulation model that integrates a dynamic input–output framework with labor market heterogeneity. Our findings indicate that the joint implementation of these policies substantially reduces labor market inequalities without compromising overall economic performance. Minimum wages help mitigate disparities across skill levels, occupational groups, and industrial sectors, while maximum wages are particularly effective in narrowing the gender pay gap. These results suggest that well-designed wage policies can serve as powerful tools for fostering more inclusive and equitable labor markets." (Author's abstract, IAB-Doku, © 2026 Elsevier B.V. All rights are reserved, including those for text and data mining, AI training, and similar technologies.) ((en))

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Rao, Nirupama L. & Max Risch (2026): Who’s Afraid of the Minimum Wage? Measuring the Impacts on Independent Businesses Using Matched U.S. Tax Returns. In: The Quarterly Journal of Economics, Jg. 141, H. 1, S. 373-427. DOI:10.1093/qje/qjaf053

Abstract

"A common concern surrounding minimum wage policies is their impact on independent businesses, which are often feared to be less able to bear or pass on cost increases. We examine how these typically small and medium-size firms accommodate minimum wage increases along product and labor market margins using a matched owner-firm-worker panel data set drawn from the universe of U.S. tax records over a 10-year period, and using state minimum wage changes as identifying variation. We find that on average, firms in highly exposed industries do not substantially reduce employment—they do not lay off workers but moderately reduce part-time hiring. Instead, these firms are able to fully finance the new labor costs with new revenues, leaving average owner profits unchanged. Higher wage floors, however, forestall entry, particularly for less productive firms, reducing the number of independent firms operating in these industries by roughly 2%. Yet these industries do not shrink; instead, incumbent responses and strong positive selection among entrants reshape industries that rely heavily on low-wage workers, yielding fewer but more productive firms after the cost shock. We also take a worker-level perspective to examine how potentially vulnerable individuals are affected by minimum wage increases. Using panels of low-earning and young workers, we find that their average earnings rise substantially with the minimum wage, while they are no less likely to be employed. Worker transitions indicate that minimum wage increases boost retention and that worker reallocation from independent firms toward corporations buffers disemployment impacts from reduced hiring at independent firms." (Author's abstract, IAB-Doku) ((en))

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Černiauskas, Nerijus & Jose Garcia-Louzao (2026): The earnings distribution in Lithuania: the role of the minimum wage. In: Journal of Economic Inequality, Jg. 24, H. 2, S. 487-507. DOI:10.1007/s10888-025-09692-7

Abstract

"In this paper, we investigate how the minimum wage has shaped the earnings distribution in Lithuania between 2010 and 2019. We rely on a distribution regression framework and detailed Social Security records to characterize the earnings distribution along with the minimum wage incidence at a monthly frequency. According to our preferred estimates, our results imply that minimum wage increases can explain about 32% (40%) of the decline in total (bottom-tail) earnings inequality and up to 20% of average earnings growth." (Author's abstract, IAB-Doku, © Springer-Verlag) ((en))

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Albagli, Pinjas, Rui Costa & Stephen Machin (2025): Minimum wage effects: adjustment through labour market dynamics and alternative work arrangements. A report for the Low Pay Commission. (CEP report 49), London: Centre for Economic Performance, LSE, 96 S.

Abstract

"This report investigates the UK's 2016 National Living Wage (NLW) introduction, focusing on firm adjustment through labour market transitions and job contract amendments. The NLW boosted worker wages, and whilst there was no change in total employment, firms adjusted through changes in employment composition and by altering employment contracts. The NLW spurred increased transitions from temporary to permanent roles, reduced underemployment, and shifted workers away from non-standard arrangements like part-time roles. However, a modest rise in zero-hour contracts among exposed workers reflects the nuanced nature of these adjustments. These contract changes, and shifts in composition and transition dynamics, provide insights into ways in which employers adjustment to cost shocks induced by minimum wage increases, and how at the same time they maintain employment stability and reshape within-firm job and career structures." (Author's abstract, IAB-Doku) ((en))

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Albertini, Julien, Arthur Poirier & Anthony Terriau (2025): Payroll Tax Reductions on Low Wages and Minimum Wage in France. (Working paper / GATE Lyon Saint-Étienne 202501), Lyon ; Saint-Étienne, 44 S.

Abstract

"Introduced in France in the 1990s to reduce the cost of low-skilled labor, payroll tax reductions on low wages were later expanded and extended to higher wages. This study evaluates the impact of the current payroll tax schedule on employment, fiscal surplus, and welfare. We develop a life-cycle matching model in which workers are heterogeneous in terms of age, education, human capital, family status, hours worked and idiosyncratic productivity, and where search effort, hiring and separations are endogenous. Accounting for interactions with the socio-fiscal system, we demonstrate that reducing payroll tax cuts for low wages would result in declines in both employment and fiscal surplus. Furthermore, we show that increasing the minimum wage would significantly reduce employment and fiscal surplus, with the magnitude of the effect depending on whether the payroll tax schedule and other socio-fiscal measures are indexed to the minimum wage. Lastly, we identify the optimal payroll tax schedule, revealing that employment, fiscal surplus, and welfare can all be improved by increasing payroll tax reductions for wages near the minimum wage while reducing them for wages exceeding twice the minimum wage." (Author's abstract, IAB-Doku) ((en))

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Appler, Felix, Christine Aumayr-Pintar & Carlos Vacas‑Soriano (2025): Minimum wages in 2025. Annual review. (Eurofound research report / European Foundation for the Improvement of Living and Working Conditions), Luxembourg, 74 S. DOI:10.2806/6315456

Abstract

"2024 was an eventful year for minimum wage regulations in most EU Member States, as the EU Minimum Wage Directive had to be transposed into national legislation by mid November. Therefore, the regular discussions on setting rates for 2025 were sometimes overshadowed by discussions regarding the required adaptations to national regulations. Most countries managed to transpose the directive by the deadline or with a short delay but still within the year. However, in a few countries, the full transposition was still pending as of mid-March 2025. This year’s edition of the annual review on minimum wages provides a comprehensive overview of recent developments. The first two chapters present the usual summaries of how national minimum wages (and collectively agreed minimum wages in countries without a national minimum wage) were set and developed for 2025. Chapter 3 focuses on the new minimum wage regulations, providing a comparative analysis of how Member States with statutory minimum wages have implemented various articles and aspects of the directive. It examines the indicative reference values adopted, the consultative bodies designated or set up, criteria that wage-setters are required to consider when uprating, approaches to variations in minimum wages and measures to promote collective bargaining. Chapter 4 focuses on minimum wage earners and their ability to afford housing, based on analysis of the latest data from the European Union Statistics on Income and Living Conditions (EU-SILC). Furthermore, this report is accompanied by two related Eurofound working papers. The first presents three country examples of how Member States have approached their adequacy assessments in the context of the Minimum Wage Directive (Eurofound, 2025a). The second provides an overview of recent research publications on minimum wages, mainly published in 2024 (Eurofound, 2025b). Finally, Eurofound’s minimum wage country profiles complement this report by providing detailed background information on how minimum wage setting is regulated and functions in the EU Member States and Norway." (Text excerpt, IAB-Doku) ((en))

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Baumann, Arne (2025): What Explains Differences in Minimum Wage Growth Between EU Member States? In: Jahrbücher für Nationalökonomie und Statistik, Jg. 245, H. 1/2, S. 7-44. DOI:10.1515/jbnst-2023-0039

Abstract

"There are considerable differences in minimum wage growth between EU member states with national minimum wages. Potential sources for these differences are discrepancies in economic fundamentals and institutional differences in how minimum wages are adjusted. Using a novel dataset based on macroeconomic data, institutional information on minimum wage setting and data on economic policy orientation and elections, the article tests whether growth differences in the minimum wage of 21 EU member states during the time period 2000 to 2020 can be explained by a catch-up dynamic in new EU member states, by different growth models of EU member states or by differences in the actors that are responsible for the adjustment of minimum wages. The results show that across the entire sample and irrespective of actors, minimum wage growth follows consumer price inflation and wage growth most closely. Higher than average minimum wage growth rates in EU member states stem from overshooting inflation during the period of EU accession, reducing wage inequality and increasing the Kaitz index. Actors also mattered for minimum wage growth. Adjustments by social partner consensus led to higher minimum wage growth than the benchmark of indexed minimum wages, introducing a distributive element to minimum wage adjustments." (Author's abstract, IAB-Doku) ((en))

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Berger, David, Kyle Herkenhoff & Simon Mongey (2025): Minimum Wages, Efficiency, and Welfare. In: Econometrica, Jg. 93, H. 1, S. 265-301. DOI:10.3982/ecta21466

Abstract

"Many argue that minimum wages can prevent efficiency losses from monopsony power. We assess this argument in a general equilibrium model of oligopsonistic labor markets with heterogeneous workers and firms. We decompose welfare gains into an efficiency component that captures reductions in monopsony power and a redistributive component that captures the way minimum wages shift resources across people. The minimum wage that maximizes the efficiency component of welfare lies below $8.00 and yields gains worth less than 0.2% of lifetime consumption. When we add back in Utilitarian redistributive motives, the optimal minimum wage is $11 and redistribution accounts for 102.5% of the resulting welfare gains, implying offsetting efficiency losses of −2.5%. The reason a minimum wage struggles to deliver efficiency gains is that with realistic firm productivity dispersion, a minimum wage that eliminates monopsony power at one firm causes severe rationing at another. These results hold under an EITC and progressive labor income taxes calibrated to the U.S. economy." (Author's abstract, IAB-Doku) ((en))

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Blau, Francine D., Isaac Cohen, Matthew Comey, Lawrence Kahn & Nikolai Boboshko (2025): The Minimum Wage and Inequality Between Groups. (CESifo working paper 12371), München, 50 S.

Abstract

"Using 1979-2019 Current Population Survey data, we study the effect of state and federal minimum wage policies on gender, race, and ethnic inequality. We find that minimum wages substantially reduce intergroup wage inequality at least up to the 20th wage percentile, with no evidence of adverse employment effects. We conduct counterfactual simulations of between-group inequality due to minimum wage changes since 1979. Declines in the real minimum wage in the 1980s slowed progress in narrowing between-group inequality. Relatively small changes in minimum wages during 1989-1998 and 1998-2007 meant little role for the minimum wage over those time spans. Since 2007, several states have steeply raised their minimum wages, especially raising Hispanics' relative wages, because they earn low wages and reside disproportionately in those states. Finally, we find that raising the federal minimum wage to $12/hour in 2020 dollars ($14.49 in 2025Q2 dollars) would reduce existing between-group wage gaps below the 15th percentile by 25-50%." (Author's abstract, IAB-Doku) ((en))

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Brochu, Pierre, David A. Green, Thomas Lemieux & James Townsend (2025): The Minimum Wage, Turnover, and the Shape of the Wage Distribution. In: Journal of labor economics, S. 1-58. DOI:10.1086/740189

Abstract

"This paper models the distributional effects of minimum wages using a hazard-based approach that rescales the wage distribution to control for possible employ-ment effects. Contrary to the predictions of a neoclassical model, Job Leaversare not concentrated below the new minimum wage following a minimum wageincrease. For Job Stayers, the spike and spillover effects of the minimum wageare simply shifted right to the new minimum wage. These findings are consistentwith a model where entry wages are set according to a job ladder, and where firmspreserve their internal wage structure due to fairness or internal incentives issues." (Author's abstract, IAB-Doku) ((en))

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Burkhauser, Richard V., Drew McNichols & Joseph J. Sabia (2025): Minimum Wages and Poverty: New Evidence from Dynamic Difference-in-Differences Estimates. In: The Review of Economics and Statistics, S. 1-53. DOI:10.1162/rest_a_01590

Abstract

"This study re-examines Dube (2019), which finds large and statistically significant poverty-reducing effects of the minimum wage. We show that his estimated elasticities are fragile and sensitive to (1) time period under study, (2) choice of macroeconomic controls, (3) limiting counterfactuals to geographically proximate states (“close controls”), which poorly match treatment states' pre-treatment poverty trends, and (4) accounting for potential bias caused by heterogeneous and dynamic treatment effects. Using data spanning nearly four decades from the March Current Population Survey and a dynamic difference-in-differences (DiD) approach, we find that a 10 percent increase in the minimum wage is associated with a (statistically insignificant) 0.17 percent increase in the probability of longer-run poverty among all persons. With 95% confidence, we can rule out long-run poverty elasticities with respect to the minimum wage of less than -0.129. Our null results persist across a variety of DiD estimation strategies, including two-way fixed effects, stacked DiD, Callaway and Sant'Anna, and synthetic DiD. We conclude that, to date, the preponderance of evidence suggests that minimum wage increases are an ineffective policy strategy for alleviating poverty." (Author's abstract, IAB-Doku, © MIT Press Journals) ((en))

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Chan, Marc K. & Akbar Zamanzadeh (2025): Minimum wage and employment in the U.S.: an application of Bayesian quantile kink regression. In: Econometric Reviews, Jg. 44, H. 6, S. 673-695. DOI:10.1080/07474938.2025.2451339

Abstract

"We examine whether the employment effects of minimum wage depend on unknown tipping points in the labor market. We apply a continuous threshold regression model—regression kink with unknown thresholds—to U.S. state-level panel data in 1993–2016 to estimate the tipping point and quantile employment effects. Overall, we find that the marginal effect is near-zero or mildly negative below the tipping point, and it is considerably more negative above it. The tipping occurs at 50–55% of the state’s median wage among women and 40–45% among men. Simulations of minimum wage reforms reveal nonlinear and asymmetric employment effects." (Author's abstract, IAB-Doku) ((en))

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Chen, Jiwei & Zhigang Xu (2025): Can minimum wage increases narrow the gender wage gap? Evidence from China. In: Applied Economics, Jg. 57, H. 52, S. 8726-8744. DOI:10.1080/00036846.2024.2402953

Abstract

"Using data from the 2011–2019 China Household Finance Survey (CHFS), this paper examines the effect of minimum wage increases on the gender wage gap. The results show that minimum wage increases can significantly reduce the gender wage gap. We further examine the impact of minimum wages on the gender wage gap across the wage distribution and find that minimum wages are conducive to narrowing the gender wage gap at the bottom and middle parts of the wage distribution, but not conducive to reducing the gender wage gap at the upper part of the wage distribution. We also identity heterogeneous effects of minimum wages on the gender wage gap across age, education level, hukou, and work unit. Finally, we find that minimum wages have a negative effect on low-wage workers’ employment. Therefore, governments need to weigh their role in reducing the gender wage gap against the potential negative employment effects when adjusting the minimum wage standard." (Author's abstract, IAB-Doku) ((en))

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Chiswick, Barry, Hope Corman, Dhaval M. Dave & Nancy Reichman (2025): Effects of the Minimum Wage on Employment of Young Adults with Cognitive Disabilities. (NBER working paper / National Bureau of Economic Research 33990), Cambridge, Mass, 43 S.

Abstract

"This study analyzes, for the first time, the effect of increases in the minimum wage on the labor market outcomes of working age adults with cognitive disabilities, a vulnerable and low-skilled sector of the actual and potential labor pool. Using data from the American Community Survey (2008-2023), we estimated effects of the minimum wage on employment, labor force participation, weeks worked, and hours worked among working age individuals with cognitive disabilities using a generalized difference-in-differences research design. We found that a higher effective minimum wage leads to reduced employment and labor force participation among individuals with cognitive disabilities but has no significant effect on labor supply at the intensive margin for this group. Adverse impacts were particularly pronounced for those with lower educational attainment. In contrast, we found no significant labor market effects of an increase in the minimum wage for individuals with physical disabilities or in the non-disabled population." (Author's abstract, IAB-Doku) ((en))

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Clemens, Jeffrey, Melissa D. Gentry & Jonathan Meer (2025): Divergent Paths: Differential Impacts of Minimum Wage Increases on Individuals with Disabilities. (NBER working paper / National Bureau of Economic Research 33437), Cambridge, Mass, 39 S.

Abstract

"We analyze the differential effects of minimum wage increases on individuals with disabilities using data from the American Community Survey and leveraging state-level minimum wage variation during the 2010s. We find that large minimum wage increases significantly reduce employment and labor force participation for individuals of all working ages with severe disabilities. These declines are accompanied by a downward shift in the wage distribution and an increase in public assistance receipt. By contrast, we find no employment effects for all but young individuals with either non-severe disabilities or no disabilities. Our findings highlight important heterogeneities in minimum wage impacts, raising concerns about labor market policies' unintended consequences for populations on the margins of the labor force." (Author's abstract, IAB-Doku) ((en))

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Clemens, Jeffrey & Michael Strain (2025): The eterogeneous Effects of Large and Small Minimum Wage Changes: Evidence Using a Partially Pre-Committed Analysis Plan. In: Journal of labor economics. DOI:10.1086/736552

Abstract

"This paper advances the use of partially pre-committed analysis plans in non-experimental research settings. In a study of recent minimum wage changes, we demonstrate how analyses of longer-run impacts of policy interventions can be pre-specified as extensions to very short-run analyses. Further, our pre-analysis plan includes comparisons of the effects of large vs.small minimum wage increases, which is a theoretically motivated dimension ofheterogeneity. We discuss how these use cases harness the strengths of pre-analysis planswhile mitigating their weaknesses. This project’s initial analyses explored CPS and ACS datafrom 2011 through 2015. Alongside these analyses, we pre-committed to analysesincorporating CPS and ACS data extending through 2019. Averaging across thespecifications in our pre-analysis plan, we estimate that relatively large minimum wage increases reduced employment rates among individuals with low levels of experience andeducation by just over 2 and a half percentage points during the decade prior to the onset ofthe Covid-19 pandemic. Our estimates of the effects of relatively small minimum wage increases vary across data sets and specifications but are, on average, both economically and statistically indistinguishable from zero. We estimate that the elasticity of employment with respect to the minimum wage is substantially more negative for large minimum wage increases than for small increases." (Author's abstract, IAB-Doku) ((en))

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Clemens, Jeffrey, Olivia Edwards & Jonathan Meer (2025): Did California's Fast Food Minimum Wage Reduce Employment? (NBER working paper / National Bureau of Economic Research 34033), Cambridge, Mass, 31 S.

Abstract

"We analyze the effect of California's $20 fast food minimum wage, which was enacted in September 2023 and went into effect in April 2024, on employment in the fast food sector. In unadjusted data from the Quarterly Census of Employment and Wages, we find that employment in California's fast food sector declined by 2.7 percent relative to employment in the fast food sector elsewhere in the United States from September 2023 through September 2024. Adjusting for pre-AB 1228 trends increases this differential decline to 3.2 percent, while netting out the equivalent employment changes in non-minimum-wage-intensive industries further increases the decline. Our median estimate translates into a loss of 18,000 jobs in California's fast food sector relative to the counterfactual." (Author's abstract, IAB-Doku) ((en))

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Clemens, Jeffrey & Michael R. Strain (2025): The Heterogeneous Effects of Large and Small Minimum Wage Changes on Hours Worked: Evidence Using a Partially Pre-Committed Analysis Plan. (IZA discussion paper / Forschungsinstitut zur Zukunft der Arbeit 17913), Bonn, 69 S.

Abstract

"In a study of recent minimum wage changes (Clemens and Strain, forthcoming), we demonstrate how analyses of longer-run impacts of policy interventions can be pre-specified as extensions to very short-run analyses. This paper uses this novel methodology to study the effects of minimum wage increases on hours worked. Analyzing CPS and ACS data with the empirical specifications from our partially pre-committed analysis plan, we estimate that relatively large minimum wage increases reduced usual hours worked per week among individuals with low levels of experience and education by just under one hour per week during the decade prior to the onset of the Covid-19 pandemic. Our estimates of the effects of relatively small minimum wage increases vary across data sets and specifications but are, on average, both economically and statistically indistinguishable from zero. We estimate that the elasticity of hours worked with respect to the minimum wage is substantially more negative for large minimum wage increases than for small increases." (Author's abstract, IAB-Doku) ((en))

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Derenoncourt, Ellora, Francois Gerard, Lorenzo Lagos & Claire Montialoux (2025): Minimum Wages and Informality. (CEPR discussion paper / Centre for Economic Policy Research 20797), London, 32 S.

Abstract

"How do minimum wages affect informality? We study the near-doubling of the real minimum wage from 2000 to 2009 in Brazil, where 46% of the workforce is informal. Using labor force surveys covering the informal sector, we show the minimum wage exhibits near full passthrough to informal employees working in formal firms, about half of all informal employees. The formal-to-informal reallocation elasticity with respect to the formal wage is small: -0.28. Our findings illustrate how minimum wages can positively affect living standards for workers thought beyond the reach of labor law, a sizable share of the workforce in developing economies." (Author's abstract, IAB-Doku) ((en))

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Doucouliagos, Hristos & Katarina Zigova (2025): Minimum Wages and Human Capital Investment: A Meta‐Regression Analysis. In: BJIR, Jg. 63, H. 4, S. 567-586. DOI:10.1111/bjir.12881

Abstract

"We apply meta-regression analysis to assess the effect of the minimum wage on two types of human capital, formal education enrolment and on-the-job training, using 892 reported estimates of these effects. On average, raising the minimum wage reduces enrolment in all countries assessed. The minimum wage has a somewhat moderate positive effect on training in the United States and no significant training effect elsewhere. There is no publication bias in the formal education and modest bias in the training literature. Heterogeneity among reported estimates is primarily driven by data differences, alternative specifications and measures of the relevant variables." (Author's abstract, IAB-Doku, Published by arrangement with John Wiley & Sons) ((en))

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Forth, John, Carl Singleton, Alex Bryson, Van Phan, Felix Ritchie, Lucy Stokes & Damian Whittard (2025): The Impact of a Rising Wage Floor on Labour Mobility Across Firms. In: BJIR, Jg. 63, H. 4, S. 746-757. DOI:10.1111/bjir.70008

Abstract

"In April 2016, the National Living Wage (NLW) raised the statutory wage floor for employees in the United Kingdom aged 25 and above by 50 pence per hour. This uprating was almost double any in the previous decade and expanded the share of jobs covered by the wage floor by around 50%. Using a difference-in-differences approach with linked employer–employee data from the UK's Annual Survey of Hours and Earnings, we examine how the introduction and uprating of the NLW affected the likelihood of minimum-wage employees changing firms. We find some evidence that the NLW reduced the rate of job-to-job transitions among such workers, consistent with predictions that an increase in the wage floor discourages job search. However, we find no evidence that the NLW affected differences in job mobility between minimum wage workers and their co-workers in the same firm. Together, these findings suggest that the increased wage floor made quits less attractive to minimum-wage workers in firms with limited opportunities for progression." (Author's abstract, IAB-Doku) ((en))

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García, Jorge Luis, Patrick L. Warren & L. Reed Watson (2025): Basic Income and the Dynamics of Employment and Human Capital in a Non-Urban Disadvantaged Setting. (NBER working paper / National Bureau of Economic Research 33891), Cambridge, Mass, 54 S.

Abstract

"Why and when could basic income inhibit employment? We randomize 200 dollars of basic income per month for two years within a non-urban disadvantaged sample tracked using high-frequency administrative data. The amount provided is 21% of average all-source income. In the short term (0.5 years after baseline), relative to the control group, treatment-group employment decreases by 58%, average all-source income remains constant, and health-investment rates increase. In the longer term (1.25 years after baseline), employment and health-investment rates revert to their control-group counterparts. Treatment participants receive basic income, take time off work, address health needs, and, subsequently, reintegrate into employment." (Author's abstract, IAB-Doku) ((en))

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Jha, Priyaranjan, Jyotsana Kala, David Neumark & Antonio Rodriguez-Lopez (2025): City Size, Monopsony, and the Employment Effects of Minimum Wages. (NBER working paper / National Bureau of Economic Research 33862), Cambridge, Mass, 28 S.

Abstract

"We assess how minimum wage effects on restaurant employment in the U.S. vary with labor market size and monopsony power. Using city-level data, we construct monopsony proxies based on labor flows and concentration. Minimum wages bind less in larger cities, consistent with the urban wage premium, and omitting this relationship overstates how labor market power reduces adverse employment effects of minimum wages. Nonetheless, accounting for city size, lower job market fluidity is linked to weaker negative employment effects, consistent with search models. By contrast, traditional concentration measures do not consistently predict variation in the effects of minimum wages." (Author's abstract, IAB-Doku) ((en))

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Kazekami, Sachiko & Masahiro Abe (2025): Effects of minimum wage changes on labor demand: analysis using job postings data. In: Applied Economics, S. 1-16. DOI:10.1080/00036846.2025.2579945

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Kim, Jung Hyun, Marc Suhrcke & Anja K. Leist (2025): The unintended effects of a large minimum wage increase on health: Evidence from South Korea. In: Social Science & Medicine, Jg. 365. DOI:10.1016/j.socscimed.2024.117626

Abstract

"The 2018 minimum wage increase in South Korea was a major policy change that impacted employment and labour productivity, but its effects on health have not yet been explored. The minimum wage was increased by 16.4% in January 2018, marking the largest increase over two decades and a substantial increase by international standards. While this policy change was a promise of the then-new government, the magnitude of its increase was unexpected. Using a difference-in-differences design with data from the 2016 and 2018 Korean Longitudinal Study on Aging, this study focuses on individuals targeted by the minimum wage policy, particularly older adults earning the minimum wage. Unexpectedly, our results indicate a statistically significant decrease in cognitive function within the targeted group, following the minimum wage hike. However, we did not observe any significant changes in self-reported health. Importantly, for the period 2014 and 2016, when the minimum wage increase was relatively modest, we found positive effects on cognitive health and no negative effects on self-reported health, suggesting that negative effects on cognition emerged only with the large minimum wage increase in 2018. These perhaps unexpected findings may be explained by a significant reduction in the working hours of the targeted group." (Author's abstract, IAB-Doku, © 2024 TheAuthors. Published by Elsevier Ltd.) ((en))

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Kim, Jiyoon, Michael Levere & Ellen Magenheim (2025): Do minimum wage increases induce changes in work behavior for people with disabilities? Evidence from the AbilityOne program. In: Labour Economics, Jg. 92. DOI:10.1016/j.labeco.2024.102663

Abstract

"We provide the first evidence on the effects of minimum wage increases on labor market outcomes for people with disabilities. We use a novel dataset consisting of quarterly data on employment, earnings, and hours for workers at nonprofit firms that participate in the federal AbilityOne program. The nonprofits in this program are offered advantages in government contracting, though must primarily employ workers with disabilities. Using recent local variation in minimum wage changes, we find that increasing the minimum wage does not affect employment outcomes for workers with disabilities in this specific context, with precisely estimated null effects. However, these nonprofits respond along non-employment related margins after relatively large minimum wage increases." (Author's abstract, IAB-Doku, © 2024 Elsevier B.V. All rights are reserved, including those for text and data mining, AI training, and similar technologies.) ((en))

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Kozák, Michal & Georg Picot (2025): The politics of the minimum wage: Explaining introduction and levels. In: BJIR, Jg. 63, H. 1, S. 161-179. DOI:10.1111/bjir.12836

Abstract

"There is much economics research on the effects of minimum wages, but little research on their politics. Yet, ever more advanced capitalist democracies have introduced minimum wages, and the setting of minimum wage levels has become increasingly politicized. This article is the first comprehensive study of the politics of the minimum wage: We analyse the determinants of adopting minimum wages as well as what explains variation in their levels over time, based on a dataset of 33 OECD countries from 1960 to 2017. We find that the decline in collective bargaining is the main driving force behind the introduction of ever more minimum wages. At the same time, left-wing parties in government are most likely to adopt a minimum wage when bargaining coverage is low. Left governments are also associated with higher minimum wages, especially when the government has full control over level-setting." (Author's abstract, IAB-Doku, Published by arrangement with John Wiley & Sons) ((en))

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Kudlyak, Marianna, Murat Tasci & Didem Tüzemen (2025): Minimum wage increases and vacancies. In: Labour Economics, Jg. 97. DOI:10.1016/j.labeco.2025.102765

Abstract

"We use a unique data set and a novel identification strategy to estimate the effect of minimum wage increases on vacancy postings. Utilizing occupation-specific county-level vacancy data from the Conference Board ’s Help Wanted Online for 2005-18, we find that state-level minimum wage increases lead to substantial declines in existing and new vacancy postings in occupations with a larger share of workers earning close to the effective minimum wage. We estimate that a 10 percent increase in the state-level effective minimum wage reduces vacancies in these occupations relative to the rest by 2.4 percent in the same quarter, and the cumulative effect is as large as 4.5 percent a year later. Focusing on vacancies rather than employment allows us to highlight changes in firms’ hiring intentions in response to minimum wage increases. Coupled with the earlier U.S. evidence showing reductions in separations following minimum wage hikes, our finding of declining vacancies contributes to the broader empirical literature suggesting negligible effects of minimum wage increases on net employment." (Author's abstract, IAB-Doku, © 2025 Published by Elsevier B.V.) ((en))

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Liu, Enmeng, Weijie Wang & Xiaoyang Yao (2025): How does the minimum wage increase the incomes of low-income residents? In: Applied Economics, S. 1-17. DOI:10.1080/00036846.2025.2589450

Abstract

"The minimum wage system aims to raise the incomes of low-income residents for common prosperity; however, conflicts of interest may affect policy effectiveness. Although employment, enterprise compliance, and government support can help raise low-income residents’ incomes, most studies overlook the interactions among low-income residents, enterprises, and the government under the minimum wage system. Therefore, this study analyzes the effect of the minimum wage on low-income residents’ incomes via enterprises’ employment and training and explores the government’s role in reducing negative impacts. This study constructs a tripartite evolutionary game model incorporating low-income residents, enterprises, and the government. The results show that employment, enterprises’ compliance with minimum wage standards, and government support of the minimum wage system constitute stable equilibrium points, which increase low-income residents’ incomes. The policy simulation results show that an appropriate minimum wage attracts low-income residents to employment. Combined with training subsidy policies with positive spillover effects, this increases the upper limit of the minimum wage for enterprises and breaks the vicious cycle of low skills leading to low incomes. Furthermore, maintaining a proper gap between the minimum wage and unemployment insurance and ensuring moderate supervision and punishment allow the minimum wage to effectively increase low-income residents’ incomes." (Author's abstract, IAB-Doku) ((en))

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López-Bazo, Enrique, Raul Ramos, Vicente Royuela, Oscar Molina, Pablo Sanz De Miguel & Carlos Vacas‑Soriano (2025): Impact of national minimum wages on collective bargaining and wages for low-paid workers. (Eurofound research report / European Foundation for the Improvement of Living and Working Conditions), Dublin, 101 S. DOI:10.2806/2659787

Abstract

"Increases in national minimum wages can have various knock-on effects – they can, for instance, lead to wage rises more generally and can influence the social partners’ latitude in collective bargaining. This report examines how changes to national minimum wages affect collectively agreed and actual wages in selected low-paid jobs and sectors. A quantitative analysis uses the Eurofound database on minimum wages for low-paid workers in collective agreements to analyse the impact of national minimum wages on collectively agreed minimum wages. Data from European Union Statistics on Income and Living Conditions are used to analyse the impact of national minimum wages on actual wages. A qualitative analysis is based on national case studies of the residential and social care and the manufacture of food and beverages sectors in six Member States: France, Germany, Portugal, Romania, Slovenia and Spain. These Member States were selected because they differ in terms of the interaction between national minimum wages and collectively agreed wages. The analysis finds that, generally, there is a positive association between national minimum wage uprates and changes to both actual and negotiated wages in low-paid sectors, although there are differences among the countries." (Author's abstract, IAB-Doku) ((en))

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Lübker, Malte & Thorsten Schulten (2025): WSI-Mindestlohnbericht 2025. Neuorientierung der Mindestlohnpolitik führt zu realer Aufwertung. In: WSI-Mitteilungen, Jg. 78, H. 2, S. 108-121. DOI:10.5771/0342-300x-2025-2-108

Abstract

"Auf Basis von Daten für 38 Länder in Europa und Übersee analysiert der diesjährige WSI-Mindestlohnbericht die Entwicklung der Mindestlöhne zum Stichtag 1. Januar 2025. Innerhalb der Europäischen Union hat sich das nominale Wachstum der Mindestlöhne zwar etwas abgeschwächt, lag mit 6,2 % im Median aber weiterhin verhältnismäßig hoch. Aufgrund rückgängiger Inflationsraten verblieb nach der Preisbereinigung mit 3,8 % im Median aber ein stärkeres Realwachstum als in den Vorjahren. Getragen wird die Entwicklung insbesondere von den osteuropäischen EU-Ländern. Der WSI-Mindestlohnbericht führt die Entwicklung auf eine Neuorientierung der nationalen Mindestlohnpolitiken im Zuge der Umsetzung der Europäischen Mindestlohnrichtlinie zurück. Wie der Bericht zeigt, sind die dort verankerten Schwellenwerte für einen angemessenen Mindestlohn von 60 % des Median- und 50 % des Durchschnittslohns inzwischen in vielen Ländern als Zielvorgaben übernommen worden." (Autorenreferat, IAB-Doku)

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Majchrowska, Aleksandra & Sylwia Roszkowska (2025): Does aging matter in the impact of the minimum wage on inflation? (MPRA paper / University Library of Munich 123506), München, 17 S.

Abstract

"We examine how demographic changes impact the transmission of minimum wage increases to inflation. The minimum wage growth can raise the prices of goods and services and accelerate inflationary processes. At the same time, a shrinking workforce and changes in its structure could lead to changes in the impact of minimum wage increases on the economy. We use the minimum wage augmented Phillips curve framework extended with the demographic variables. We employ the sample of 21 European Union countries in 2003-2023 and panel data techniques. Our study proves that the strength of the minimum wage pass-through effects on inflation depends on demographic factors. Aging of the workforce and shrinking workforce size weakens the impact of minimum wage increase on inflation. Contrary, a lower proportion of the less educated working-age population strengthens the minimum wage pass-through effects on inflation. Our results have important implications for macroeconomic, minimum wage, and education policies." (Author's abstract, IAB-Doku) ((en))

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Melo, Vitor C., Christopher Kaiser, David Neumark, Liya Palagashvili & Michael D. Farren (2025): Minimum Wage Laws and Job Search. (NBER working paper / National Bureau of Economic Research 33433), Cambridge, Mass, 37 S.

Abstract

"A large theoretical literature on job search predicts that a higher minimum wage will increase the number of job seekers for affected jobs, which can lead to more job creation and higher employment. This paper uses novel data on job search in all U.S. states to examine the effect of minimum wage increases on the number of job seekers for low-skilled positions. We find no evidence that higher minimum wages increase job search for low-skilled jobs. Instead, the evidence suggests that higher minimum wages decrease the number of workers seeking employment." (Author's abstract, IAB-Doku) ((en))

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Miller, Stephen, Gary A. Wagner & Alicia Plemmons (2025): Employment effects of minimum wage indexing: Establishment evidence from Oregon restaurants. In: Economic Inquiry, Jg. 63, H. 3, S. 681-714. DOI:10.1111/ecin.13284

Abstract

"Though 18 states will index their minimum wage to the Consumer Price Index by 2025, few studies have examined indexing's differential employment effects. Leveraging a period of stability in minimum wages (2000–2007) and two distinct national geocoded databases of establishments, we explore how indexing affected employment in Oregon restaurants, one of the earliest indexing states (2003). Nearest-neighbor matching is used as a preprocessing step before regression, pairing individual restaurants in Oregon to restaurants with similar characteristics in states where the minimum wage was unchanged. We find evidence that establishment employment falls 3.6% after indexing, implying an employment elasticity of −0.18." (Author's abstract, IAB-Doku, Published by arrangement with John Wiley & Sons) ((en))

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Monray, Jorge & Juan Morillo (2025): Minimum Wage and Effects on Unemployment: The Case of Spain and Its Implications on Simpson’s Paradox and Geographical Mobility. In: International journal of economics and finance, Jg. 17, H. 2, S. 26-44. DOI:10.5539/ijef.v17n2p26

Abstract

"This research explains the effects of the Government’s regular increases in the minimum wages on unemployment in Spain. Using a longitudinal analysis covering the years 2010 to 2023 the research collects data split by gender, age group, and Autonomous Community (AC). The data has been adjusted calculating the minimum wage Mean and Mode values. A negative or inverse correlation between minimum wage variables and unemployment is observed presenting Pearson values between -0.4 and -0.6 in most groups. Also, the research applies a one-way ANOVA test. It shows findings of unemployment reduction, specifically in the categories of young males, even though, the minimum wage in Spain has been regularly increased during the last years, in line with other authors. The aggregated and disaggregated data obtained vary and move in opposite directions confirming in a certain way that the principle of the Simpson’s Paradox could take place here. The research also confirms a relevant Estimated Size Effect (ETA) when comparing Autonomous Communities and their influence on unemployment for 55+ years old people." (Author's abstract, IAB-Doku) ((en))

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Nicolitsas, Daphne (2025): The Minimum Wage in Greece: A Review of Institutional Features, Developments and Effects Between 1975 and 2023. In: Jahrbücher für Nationalökonomie und Statistik, Jg. 245, H. 1-2, S. 79-111. DOI:10.1515/jbnst-2023-0041

Abstract

"This paper takes a historical perspective and assesses the evolution of the institutional features in setting the minimum wage in Greece between 1975 and 2023. It also evaluates developments regarding the minimum wage level, its bite and alignment with productivity. The paper reviews the limited available empirical literature on the association of the minimum wage with labour market outcomes (average wages, employment, inequality). It presents new estimates of the elasticity of average wages to the minimum wage. One of the paper’s key points is that the minimum wage setting mechanism has changed over time as the economic environment has changed. Reviewing the evolution of the minimum wage over time to evaluate whether the minimum wage follows productivity developments and whether the minimum wage bites leads to the second and third takeaways of the paper. The minimum wage follows productivity developments over the longer term but not always in the short term. The bite of the minimum wage is high and appears to be higher when government intervention in setting the minimum wage is stronger. As for the impact of the minimum wage on average wages, the new estimates of the elasticity of the average to the minimum wage the paper provides, use more precisely measured wage rates, which show a high elasticity of average to minimum wages. Finally, the review of the existing literature on the employment effects of the minimum wage shows that, as in other countries, the results are mixed with modest negative or no effects." (Author's abstract, IAB-Doku, © De Gruyter) ((en))

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Redmond, Paul & Seamus McGuinness (2025): The impact of a minimum wage increase on hours worked: heterogeneous effects by gender and sector. In: Economica, Jg. 92, H. 365, S. 84-106. DOI:10.1111/ecca.12555

Abstract

"A minimum wage increase could lead to adverse employment effects for certain subgroups of minimum wage workers, while leaving others unaffected. This heterogeneity could be overlooked in studies that examine the overall population of minimum wage workers. In this paper, we test for heterogeneous effects of a minimum wage increase on the hours worked of minimum wage employees in Ireland. For all minimum wage workers, we find that a 10% increase in the minimum wage leads to a one-hour reduction in weekly hours worked, equating to an hours elasticity of approximately −0.3. However, for industry workers and those in the accommodation & food sector, the impact is larger, with elasticity −0.8. We also find a negative impact on the hours worked among men on minimum wage, with no significant effect for women. This is due to the disproportionate number of men working in sectors that show the greatest impact on hours. In line with suggestions from the recent literature, we attempt to identify directly those in receipt of minimum wage using hourly wage data, while also studying the dynamic impact on hours worked over multiple time periods using a fully flexible difference-in-differences estimator." (Author's abstract, IAB-Doku, Published by arrangement with John Wiley & Sons) ((en))

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Redmond, Paul, Seamus McGuinness & Elish Kelly (2025): Labour Market Dynamics of Minimum Wage Workers. (IZA discussion paper / Forschungsinstitut zur Zukunft der Arbeit 17598), Bonn, 16 S.

Abstract

"Ireland is the only country in Europe with a direct question in its Labour Force Survey to identify minimum wage employees. By combining this with the longitudinal component of the Labour Force Survey, we examine the labor market transitions of minimum wage employees over a period of up to five quarters. After one quarter, just over half of minimum wage employees are still on minimum wage while 28 percent have moved to higher pay. After one year, almost half have moved to higher pay, with just one-third remaining on minimum wage. Employees that move to higher pay are more likely to change jobs compared to those that stay on minimum wage. Despite this, the majority (almost 90 percent) of minimum wage employees that transition to higher pay do so with the same employer. We employ a dynamic random effects probit model to estimate the degree of genuine state dependence of minimum wage employment. While there is some degree of true state dependence, much of the persistence in minimum wage employment is due to observed and unobserved heterogeneity, whereby minimum wage employees possess characteristics that result in them entering, and staying on, minimum wage. Our results also indicate that minimum wage employees are about five times more likely than higher paid employees to transition into economic inactivity. However, the majority of these are young people in education, and as such may not be overly concerning to policymakers." (Author's abstract, IAB-Doku) ((en))

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Sadowski, Katharine C. (2025): The Effect of the Minimum Wage on Childcare Establishments. (Working papers / U.S. Census Bureau, Center for Economic Studies 2025-53), Washington, DC, 90 S.

Abstract

"Childcare is essential for working families, yet it remains increasingly unaffordable and inaccessible for parents and offers poverty-level wages to many employees. While research suggests minimum wage policies may improve the welfare of low-wage workers, there is also evidence they may increase firm exits, especially among smaller, low-profit firms, which could reduce access and harm consumer well-being. This study is the first to examine these trade-offs in the childcare industry, a labor-intensive, highly regulated sector where capital-labor substitution is limited, and to provide evidence on how minimum wage policies affect a dual-sector labor market in the U.S., where self-employed and waged providers serve overlapping markets. Using variation from state-level minimum wage increases between 1995 and 2019 and unique microdata, I implement a cross-state county border discontinuity design to estimate impacts on the stocks, flows, and composition of childcare establishments. I find that while county-level aggregate establishment stocks and employment remained stable, establishment-level turnover increased, and employment decreased. I reconcile these findings by showing that minimum wage increases prompted reallocation, with larger establishments in the waged-sector more likely to enter and less likely to exit, making this one of the first studies to link null aggregate effects to shifts in establishment composition. Finally, I show that minimum wage increases may negatively affect the self-employed sector, resulting in fewer owners with advanced degrees and more with only high school education. These findings suggest that minimum wage policies reshape who provides care in ways that could affect both quality and access." (Author's abstract, IAB-Doku) ((en))