Wang-Sheng Lee is at the School of Economics, Finance and Marketing, RMIT University. Sandy Suardi is at the Department of Economics and Finance, La Trobe University.
Minimum Wages and Employment: Reconsidering the Use of a Time Series Approach as an Evaluation Tool
Article first published online: 1 JUL 2010
© Blackwell Publishing Ltd/London School of Economics 2010
British Journal of Industrial Relations
Special Issue: The London School of Economics and Wiley-Blackwell present the second of two additional online-only supplement issues for 2011
Volume 49, Issue Supplement s2, pages s376–s401, July 2011
How to Cite
Lee, W.-S. and Suardi, S. (2011), Minimum Wages and Employment: Reconsidering the Use of a Time Series Approach as an Evaluation Tool. British Journal of Industrial Relations, 49: s376–s401. doi: 10.1111/j.1467-8543.2010.00799.x
- Issue published online: 16 JUN 2011
- Article first published online: 1 JUL 2010
- Final version accepted on 1 February 2010.
The time series approach used in the minimum wage literature essentially aims to estimate a treatment effect of increasing the minimum wage. In this article, we employ a novel approach based on aggregate time series data that allows us to determine if minimum wage changes have significant effects on employment. This involves the use of tests for structural breaks as a device for identifying discontinuities in the data, which potentially represent treatment effects. In an application based on Australian data, the tentative conclusion is that the introduction of minimum wage legislation in Australia in 1997 and subsequent minimum wage increases appear not to have had any significant negative employment effects for teenagers.