The ambiguous effect of minimum wages on hours

Strobl, Eric; Walsh, Frank

doi:10.1016/j.labeco.2010.09.004

Cited by 20 publications

(10 citation statements)

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“…This model originally developed by Lewis (1969) is the precursor of the compensating differentials model, and equilibrium is a set of tangencies in wage hours space between worker's indifference curves and the firm's isoprofit curves. Kinoshita (1987) develops the comparative static properties of this model, and Strobl and Walsh (2011) use a simplified version of Kinoshita's model with homogeneous workers and firms to analyze minimum wages and hours worked. In this simple model the number of workers supplying labor and the number of workers demanded at the mar- 3 For example, if we examine recent studies that study the impact of internal migration, Kleemens and Magruder (2014) look at employment and income per hour but do not analyze weekly hours, and Maystadt et al (2014) look at the employment probability and monthly income.…”

Section: Introductionmentioning

confidence: 99%

Impact of Internal Migration on Labor Market Outcomes of Native Males in Thailand

Badaoui

Strobl

Walsh

2017

Economic Development and Cultural Change

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1 See Lucas (1997) or Mendola (2012) for reviews of the literature on internal migration in developing countries or De Brauw, Mueller, and Lee (2014) for a review of the literature on urban-rural migration in sub-Saharan Africa. 2 We focus on males because employment rates are much higher than for females and because estimation for the latter is further complicated by needing to model the labor supply decision.

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Section: Introductionmentioning

confidence: 99%

Impact of Internal Migration on Labor Market Outcomes of Native Males in Thailand

Badaoui

Strobl

Walsh

2017

Economic Development and Cultural Change

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“…Relaxing the assumption that efficiency units are the product of hours and workers, Strobl and Walsh (2011) show that effects of minimum wages on employment and total hours are ambiguous in a competitive model framework. The predictions regarding changes in hours among remaining workers (in the case of an increase in minimum wages) and incumbent workers (in case of a decrease) are ambiguous, even in the standard competitive model.…”

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Employment effects of union-bargained minimum wages

Skedinger

2015

International Journal of Manpower

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Purpose -The purpose of this paper is to examine the effects of collectively agreed increases in minimum wages for manual workers on employment transitions and hours. Design/methodology/approach -The econometric approach relies on the identification of workers affected by minimum wage changes, depending on their position in the wage distribution and contrasts outcomes for these workers to those for unaffected workers, with slightly higher wages. Findings -The analysis suggests that separations increase as minimum wages increase and that substitution between worker groups in response to changes in minimum wages is important in retail. In general, though, hours do not change much as minimum wages increase.Research limitations/implications -Analyses that deal with employment consequences of increasing minimum wages but disregard hours may exaggerate the overall decline in employment to the extent that job losses are concentrated among low-paid, part-time workers. Practical implications -With union-bargained minimum wages, unions and employers need to carefully consider the effects of increasing rates on employment. Social implications -The findings that there is a trade-off between higher wages among the low-paid and employment loss and that employment to some extent is reshuffled between individuals should be important from a welfare perspective. Originality/value -The literature on employment effects of minimum wages is large, but very few studies are concerned with union-bargained minimum wages. The assumptions of the econometric model are tested in a novel way by imposing fictitious minimum wages on lower-level non-manuals in the same industry, with turnover characteristics similar to those of manuals but covered by a different collective agreement with non-binding actual minimum wages.

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“…18 18 Michl (2000) and Strobl and Walsh (2008) ask whether the employment effect of a minimum wage will fall on hours per worker or the number of workers employed. They show that the size and direction of the effects depend on the level of fixed costs per worker and how hours per worker vary with the scale of output.…”

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The Employment Effects of Lower Minimum Wage Rates for Young Workers: Canadian Evidence

Shannon

2011

Industrial Relations: A Journal of Economy and Society

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Between 1986 and 1998, six of the ten Canadian provinces abolished their lower minimum wage rates for younger teenage workers. Using data from the Canadian Labour Force Survey, this paper evaluates the effects of abolition on the employment and weekly hours worked of 15‐ to 16‐year‐olds using teenagers in provinces where there is no legislative change and young people above the age to which youth rates applied as control groups. The results provide some evidence that abolishing these youth rates significantly lowered employment and work hours of 15‐ to 16‐year‐olds, but the lack of evidence for some jurisdictions and patterns of effects using age controls do raise some questions regarding the interpretation of the results.

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The ambiguous effect of minimum wages on hours

Cited by 20 publications

References 21 publications

Impact of Internal Migration on Labor Market Outcomes of Native Males in Thailand

Impact of Internal Migration on Labor Market Outcomes of Native Males in Thailand

Employment effects of union-bargained minimum wages

The Employment Effects of Lower Minimum Wage Rates for Young Workers: Canadian Evidence

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