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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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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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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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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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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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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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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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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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Frangioni, Tommaso & Stella Volturo (2025): Organising Changes: The Institutional Work Behind the Implementation of a Minimum Income Scheme. In: Social Policy and Administration, S. 1-10. 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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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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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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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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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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Salverda, Wiemer (2025): The Netherlands’ Minimum Wage 1969–2022: Can We Learn from Decline? In: Jahrbücher für Nationalökonomie und Statistik, Jg. 245, H. 1-2, S. 45-78. DOI:10.1515/jbnst-2023-0036

Abstract

"This paper evaluates the evolution of the Dutch minimum wage since its introduction in 1969 and discusses this as an intriguing case suggesting that a deeper, economic analysis of firm and employee behaviors is required for minimum-wage analysis in general. The real level of the minimum wage has fallen tremendously after 1979, all the way back nowadays to the level of the early 1970s, due to the system of uprating and to government interventions. The minimum-wage employment share shows an even stronger decline after 1979, but, surprisingly, the share below the unchanged real minimum wage of 1979 and in bands above this has remained largely unchanged. Intriguingly, firms have continued paying the same. Composition shifts in minimum-wage employment are significant, towards larger enterprise on the demand side and towards part-time employees on the supply side. Nationally and internationally, virtually all available minimum-wage analyses of employment effects focus on rises of the minimum wage and ignore drops. However, OECD data show that declines are surprisingly frequent, making them perfectly normal economic occurrences that firms will account for. I argue that declines deserve examination in their own right, certainly also from a monopsonistic perspective. Plausibly, declines incite different responses from increases, and their analysis will require the examination of heterogeneous behavior of both firms and employees. Such analysis will reinforce the economics of minimum-wage analysis as advocated by David Neumark and its integration in labor economics as advocated by David Card." (Author's abstract, IAB-Doku, © De Gruyter) ((en))

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Steenks, Koen, Arjan Heyma & Tobias Vervliet (2025): The Effects of Dutch Youth Minimum Wage Increases on Income Inequality. In: De Economist, Jg. 173, H. 2, S. 299-330. DOI:10.1007/s10645-025-09451-z

Abstract

"This study employs increases in the Dutch Youth Minimum Wage (YMW) in 2017 and 2019 for certain age groups as a natural experiment to examine the impact of changes in minimum wages on income inequality through the employment-channel. Using the Difference-in-Difference (DiD) and Two-Stage Least Squares (2SLS) methods, it estimates the effects of YMW increases on hourly wages and working hours across various income segments. These effects are then used to simulate the monthly income distribution after the YMW increases in 2017 and 2019. This way, a comparative analysis is conducted between the observed income distribution prior to the YMW increases and the simulated income distribution thereafter, focusing on the aspect of income inequality. The findings reveal distinct effects based on the magnitude of the wage increase. Modest increases (for individuals aged 18–19) and substantial increases (for individuals aged 20–22 in 2017 and 20–21 in 2019) both generate spike and spillover effects, influencing individuals earning hourly wages up to at least 120% of the new minimum wage. Small increases reduce working hours for higher-income individuals, while larger increases negatively affect working hours for middle-income earners (100–150% of the new YMW) but benefit those earning below 100% and above 150% of the new threshold. Overall, both small and large YMW increases contribute to income redistribution by altering wages and working hours." (Author's abstract, IAB-Doku, © Springer-Verlag) ((en))