The Simple Economics of Wage Floors

    Research output: Chapter in Book/Report/Conference proceedingChapter


    The paper surveys minimum wages setting and finds adverse employment effects broadly in line with conventional economic models. Admittedly, UK studies generally report small effects, but the UK is poorly suited for measurement given confounding changes in welfare benefits and lack of regional variation. Clarity is found in better empirical settings such as Canada, which has sharp minimum wage variations and provincial differences, and also in the OECD country panels. Case studies are also reviewed including South Africa (the minimum wage as a white supremacy weapon), Portugal (where extension of collective agreements are analogous to minimum wages, and reduce employment), and Greece (where the minimum encourages temporary work). Alternative ways of helping the poor via encouragement of stable families, more competitive school systems, and subsidies for low paid work are advanced.
    Original languageEnglish
    Title of host publicationFlaws and Ceilings
    Subtitle of host publicationPrice Controls and the Damage They Cause
    EditorsChristopher Coyne, Rachel Coyne
    Place of PublicationLondon
    PublisherInstitute of Economic Affairs
    Number of pages36
    ISBN (Print)978-0-255-36701-1
    Publication statusPublished - 2015


    • price controls
    • minimum wages


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