Do minimum wages stimulate productivity and growth?

Artikel

Proponents of minimum wage increases have argued that such hikes can serve as an engine of economic growth and assist low-skilled individuals during downturns in the business cycle. However, a review of the literature provides little empirical support for these claims. Minimum wage increases redistribute gross domestic product away from lower-skilled industries and toward higher-skilled industries and are largely ineffective in assisting the poor during both peaks and troughs in the business cycle. Minimum wage-induced reductions in employment are found to be larger during economic recessions.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: IZA World of Labor ; ISSN: 2054-9571 ; Year: 2015 ; Bonn: Institute for the Study of Labor (IZA)

Classification and Topics

• Classification: Wirtschaft ; Wages, Compensation, and Labor Costs: Public Policy ; Wage Level and Structure; Wage Differentials
• Subject: minimum wages ; business cycle ; productivity ; poverty

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Sabia, Joseph J.
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2015

Further information

• DOI: doi:10.15185/izawol.221
• Handle: http://hdl.handle.net/10419/148446
• Last update: 10.03.2025, 11:43 AM CET