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A SURVEY OF THE EFFECTS OF THE MINIMUM WAGE ON PRICES
Article first published online: 31 JAN 2008
DOI: 10.1111/j.1467-6419.2007.00532.x
Additional Information
How to Cite
Lemos, S. (2008), A SURVEY OF THE EFFECTS OF THE MINIMUM WAGE ON PRICES. Journal of Economic Surveys, 22: 187–212. doi: 10.1111/j.1467-6419.2007.00532.x
Publication History
- Issue published online: 31 JAN 2008
- Article first published online: 31 JAN 2008
- Abstract
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Keywords:
- Minimum wage;
- Employment;
- Labour costs;
- Cost shock;
- Pass-through
Abstract It is well established in the literature that minimum wage increases compress the wage distribution. Firms respond to these higher labour costs by reducing employment, reducing profits, or raising prices. While there are hundreds of studies on the employment effect of the minimum wage, there are merely a handful of studies on its profit effects, and only a couple of dozen studies on its price effects. Furthermore, a comprehensive survey on minimum wage price effects is not available in the literature. Given the policy relevance of this neglected issue, in this paper we summarize and critically compare the available evidence on the effects of minimum wages on prices.