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The impact of minimum wages on hours and employment revisited

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  • STROBL, Eric
  • WALSH, Frank

Abstract

Using a standard production function the equilibrium hours per worker wage locus is shown to be u-shaped in a competitive labour market. A minimum wage mayth us either increase or decrease hours per worker and, by extension, the number of workers. We provide supporting evidence for this using data from Trinidad and Tobago. We argue that examining total employment or full-time equivalents is not a meaningful way to measure the employment response to a minimum wage.

Suggested Citation

  • STROBL, Eric & WALSH, Frank, 2004. "The impact of minimum wages on hours and employment revisited," LIDAM Discussion Papers CORE 2004023, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2004023
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    File URL: https://sites.uclouvain.be/core/publications/coredp/coredp2004.html
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    References listed on IDEAS

    as
    1. Altonji, Joseph G & Paxson, Christina H, 1988. "Labor Supply Preferences, Hours Constraints, and Hours-Wage Trade-Offs," Journal of Labor Economics, University of Chicago Press, vol. 6(2), pages 254-276, April.
    2. Kenneth A. Couch & David C. Wittenburg, 2001. "The Response of Hours of Work to Increases in the Minimum Wage," Southern Economic Journal, John Wiley & Sons, vol. 68(1), pages 171-177, July.
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    More about this item

    Keywords

    minimum wages; hours; employment;
    All these keywords.

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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