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Minimum Wage Legislation, Productivity and Employment

Author

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  • De Fraja, Gianni

Abstract

The effects of minimum wage legislation are analysed with the assumptions that firms are able to alter the working conditions of their employees, and that workers have different preferences about the characteristics of their job. The main findings tally with Card and Krueger's (1995) recent somewhat puzzling empirical evidence about the effects of changes in minimum wage. I find that the effects of changes in the minimum wage on employment are limited, that there is a positive spillover on high-wage workers, and that there is bunching of workers at the minimum wage. Copyright 1999 by The London School of Economics and Political Science

Suggested Citation

  • De Fraja, Gianni, 1999. "Minimum Wage Legislation, Productivity and Employment," Economica, London School of Economics and Political Science, vol. 66(264), pages 473-488, November.
    • Handle: RePEc:bla:econom:v:66:y:1999:i:264:p:473-88
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    Citations

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    Cited by:

    1. Daniel Cardona & Fernando Sanchez Losada, 2003. "Union Power, Minimum Wage Legislation, Endogenous Labor Supplies and Production," Working Papers in Economics 105, Universitat de Barcelona. Espai de Recerca en Economia.
    2. Amal Hili & Rim Lahmandi-Ayed & Hejer Lasram, 2016. "Differentiation, labor market and globalization," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 25(6), pages 809-833, September.
    3. Danziger, Eliav & Danziger, Leif, 2018. "The Optimal Graduated Minimum Wage and Social Welfare," IZA Discussion Papers 11386, Institute of Labor Economics (IZA).
    4. Bird, Kelly & Manning, Chris, 2008. "Minimum Wages and Poverty in a Developing Country: Simulations from Indonesia's Household Survey," World Development, Elsevier, vol. 36(5), pages 916-933, May.
    5. Danziger, Eliav & Danziger, Leif, 2018. "The Optimal Graduated Minimum Wage and Social Welfare," GLO Discussion Paper Series 188, Global Labor Organization (GLO).
    6. P R Agénor, 2005. "The Analytics of Segmented Labor Markets," Centre for Growth and Business Cycle Research Discussion Paper Series 52, Economics, The University of Manchester.
    7. Eliav Danziger & Leif Danziger, 2018. "The Optimal Graduated Minimum Wage and Social Welfare," CESifo Working Paper Series 6943, CESifo.
    8. Hristos Doucouliagos & T. D. Stanley, 2009. "Publication Selection Bias in Minimum-Wage Research? A Meta-Regression Analysis," British Journal of Industrial Relations, London School of Economics, vol. 47(2), pages 406-428, June.
    9. STROBL, Eric & WALSH, Frank, 2003. "Dealing with monopsony power: the case for using employment subsidies," LIDAM Discussion Papers CORE 2003079, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    10. Rubery, Jill., 2003. "Pay equity, minimum wage and equality at work," ILO Working Papers 993668723402676, International Labour Organization.
    11. Daniel Cardona & Fernando Sánchez-Losada, 2006. "Unions, qualification choice, and output," Oxford Economic Papers, Oxford University Press, vol. 58(1), pages 50-76, January.
    12. Strobl, Eric & Walsh, Frank, 2002. "Getting It Right: Employment Subsidy or Minimum Wage?," IZA Discussion Papers 662, Institute of Labor Economics (IZA).
    13. repec:ilo:ilowps:366872 is not listed on IDEAS
    14. Petrakis, Emmanuel & Vlassis, Minas, 2003. "Minimum wages in national and internationally integrated economies," Journal of Policy Modeling, Elsevier, vol. 25(3), pages 257-265, April.
    15. Strobl, Eric & Walsh, Frank, 2007. "Dealing with monopsony power: Employment subsidies vs. minimum wages," Economics Letters, Elsevier, vol. 94(1), pages 83-89, January.
    16. Eliav Danziger & Leif Danziger, 2015. "A Pareto-improving Minimum Wage," Economica, London School of Economics and Political Science, vol. 82(326), pages 236-252, April.
    17. Strobl, Eric & Walsh, Frank, 2011. "The ambiguous effect of minimum wages on hours," Labour Economics, Elsevier, vol. 18(2), pages 218-228, April.
    18. Eric Strobl & Frank Walsh, 2010. "The minimum wage and hours per worker," Working Papers 201028, School of Economics, University College Dublin.
    19. Eric Strobl & Frank Walsh, 2007. "The Ambiguous Effect of Minimum Wages on Workers and Total Hours," Working Papers 200714, School of Economics, University College Dublin.

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