Do minimum wages stimulate productivity and growth?

Sabia, Joseph J.

doi:10.15185/izawol.221

Cited by 12 publications

(11 citation statements)

References 7 publications

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“…facilitate structural reconstruction of economy and employment. • Minimum wage (MinWAGE): Based on the macroeconomic theory and researches of Sabia (2015) and other authors, we assume that there is the relationship between minimum wages, GDP, and consumption in the following way: if the government increases minimum wages, the workers can spend more (therefore, consumption raises). If the consumption increases, it has a positive effect on GDP growth.…”

Section: Empirical Model and Its Resultsmentioning

confidence: 99%

Migrant remittances and their impact on the economic development of the Baltic states

Rausser¹,

Strielkowski²,

Bilan³

et al. 2018

Geographica Pannonica

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This paper studies the determinants of international migration and remittances in the Baltic States (represented hereinafter by Lithuania, Latvia, and Estonia). The research reveals a critical view on migrant remittances in terms of macroeconomic development and social conditions in the society of each country involved into our research. In order to investigate and to demonstrate the impact of migrant remittances on GDP and consumption compared with current account balance, minimal wages, and foreign direct investment in the Baltic countries, econometric modeling based on the data of Eurostat, World Bank, and the National banks of the Baltic States has been employed. The results of this research clearly demonstrate that remittances sent by the migrants have high and positive impact on economic development in Lithuania, Latvia, and Estonia. Moreover, the findings stemming from this study confirm that minimum wages in the Latvia and Lithuania are far more important determinants of economic development than remittances.

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Section: Empirical Model and Its Resultsmentioning

confidence: 99%

Migrant remittances and their impact on the economic development of the Baltic states

Rausser¹,

Strielkowski²,

Bilan³

et al. 2018

Geographica Pannonica

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“…Bassanini and Venn (2008) find a positive impact of minimum wage on productivity, and Askenazy (2003) finds that minimum wage increases speed up long-run growth in an open economy and that the growth surplus could be significant. Sabia (2015), on the other hand, finds no evidence that minimum wage increases were associated with changes in output, but finds a shift of output from low-to higher-skilled industries.…”

Section: The New Minimum Wage Policy In Koreamentioning

confidence: 92%

Republic of Korea: Selected Issues

2018

IMF Staff Country Reports

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“…The study concluded that the increased minimum wage increased employment in the New Jersey fast-food industry and did not reduce the amount of McDonald's outlets opened in the state (Krueger & Card, 1994). On the contrary, a recent study conducted by IZA World of Labor found that increasing the minimum wage had only a redistributive effect, with no real increase to aggregate gross domestic product (GDP; Sabia, 2015). Furthermore, another study found that low-wage workers who were a target of a similar policy experienced some job loss or a reduction in hours (both considered "adjustments" made by businesses or firms in their use of labor) worked due to new minimum wage standards.…”

Section: Literature Reviewmentioning

confidence: 94%

“…Some of the studies cited in our literature review used similar models. The study done by IZA used the log form in order to explain how percent changes in minimum wage affected economic growth (Sabia, 2015). In another study measuring the effects of natural disasters on economic growth and per capita GDP, the log form was used to measure percent changes in per capita GDP as well (Toya & Skidmore, 2007).…”

Section: Model Estimationmentioning

confidence: 99%

The Effect of Minimum Wage on Per Capita Income in Arizona: Empirical Analysis

Overstreet

2019

Poverty & Public Policy

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Arizonans have elected to increase the minimum wage twice since 2006 via ballot measures while lawmakers doubt that increasing the minimum wage positively affects workers. Past studies have had conflicting results about the effects of changes in the minimum wage on various indicators of economic health. We utilize a quasi-experimental time-series study analyzing the impact a change in minimum wage has on per capita income specifically within the state of Arizona. The experiment reviews data from 1976 to 2017 from the Bureau of Labor Statistics and the St. Louis Federal Reserve. We conclude that a 1 percent increase in the minimum wage will on average produce a 1.13 percent increase in per capita income in Arizona. Although this study used data specific to Arizona, we believe that there could be a strong case for external validity based on the findings of past studies done in this research area. This conclusion could have large implications concerning the use of minimum wage as an anti-poverty and economic growth policy tool.los arizonianos han optado por aumentar el salario mínimo dos veces desde 2006 a través de medidas de votación, mientras que los legisladores dudan de que el aumento del salario mínimo afecte positivamente a los trabajadores. Estudios anteriores han obtenido resultados contradictorios sobre los efectos de los cambios en el salario mínimo en varios indicadores de salud económica. Utilizamos un estudio de series de tiempo cuasi experimentales que analizan el impacto que un cambio en el salario mínimo tiene en el ingreso per cápita específicamente dentro del estado de Arizona. El experimento revisa datos de 1976 a 2017 de la Oficina de Estadísticas Laborales (BLS) y la Reserva Federal de St. Louis. Concluimos que un aumento del 1% en el salario mínimo producirá en promedio un aumento del 1.13% en el ingreso per cápita en 156 Arizona. Aunque este estudio utilizó datos específicos de Arizona, creemos que podría haber un caso sólido para la validez externa basado en los hallazgos de estudios anteriores realizados en esta área de investigación. Esta conclusión podría tener grandes implicaciones con respecto al uso del salario mínimo como una herramienta de política de lucha contra la pobreza y el crecimiento económico.PALABRAS CLAVES: salario mínimo, ingresos per capita, Arizona

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Do minimum wages stimulate productivity and growth?

Cited by 12 publications

References 7 publications

Migrant remittances and their impact on the economic development of the Baltic states

Migrant remittances and their impact on the economic development of the Baltic states

Republic of Korea: Selected Issues

The Effect of Minimum Wage on Per Capita Income in Arizona: Empirical Analysis

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