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The effects of minimum wages on employment and prices—Evidence from the hairdressing sector

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  • Kunaschk, Max

Abstract

This paper provides comprehensive evidence on the labor and product market effects of a high-impact minimum wage introduction in the highly competitive hairdressing sector. Using detailed administrative data, I find negligible overall employment effects, even though the minimum wage substantially increased hourly wages. However, sub-group analyses reveal considerable heterogeneity in the estimated employment effects and suggest shifts away from marginal towards regular employment. Analyses of the price effects suggest that the reform increased output prices considerably, implying that consumers largely paid for the minimum wage.

Suggested Citation

  • Kunaschk, Max, 2024. "The effects of minimum wages on employment and prices—Evidence from the hairdressing sector," Labour Economics, Elsevier, vol. 88(C).
    • Handle: RePEc:eee:labeco:v:88:y:2024:i:c:s0927537124000356
    DOI: 10.1016/j.labeco.2024.102540
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    More about this item

    Keywords

    Minimum wage; Competitive labor markets; Price pass-through;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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