Employment Effects of the Minimum Wage: Panel Data Evidence From Canadian Provinces

Rybczynski, Kate; Sen, Anindya

doi:10.1111/coep.12241

Cited by 14 publications

(10 citation statements)

References 57 publications

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“…The author did not find evidence of any significant employment growth during 1983–2000 but observed a negative effect of minimum wage on employment from 2001 to 2016. Other Canadian studies that showed an adverse employment effect of minimum wage hikes include Campolieti et al (2006), Rybczynski and Sen (2018), and Sen et al (2011). Brochu and Green (2013) examined how the employment transition rate varies between the high and low minimum wage regimes in Canada.…”

Section: What We Know About Minimum Wages?mentioning

confidence: 99%

The effect of minimum wages on consumption in Canada

Jung

McFarlane

Das

2020

The Economic and Labour Relations Review

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We use Canadian data over the period of 1991Q1 to 2019Q2 to examine the effect of higher minimum wages on consumption, measured as the real retail trade sales per adult population. Such an examination is rare in the extant literature and it is timely given the increasing debate concerning the stimulus versus inflationary effects arising from wage polices because of COVID-19 global pandemic. We apply the autoregressive distributed lag model to determine the causal relationship between these variables. We find one long-run cointegrating relationship that runs from the real minimum wage to the real retail trade sales. In addition, we find that a 1% increase in the minimum wage is associated with almost a 0.5% increase in real retail trade sales in the long run. While our findings rest on several statistical assumptions, there is strong evidence in support of the position that minimum wage strengthens aggregate consumer spending, and thereby the standard of living, economic growth and stability. This is a position that differs from the conclusions drawn from mainstream academic and policy debates on the economic usefulness and efficacy of minimum wage increases. JEL Codes: C30, E21, E24

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Section: What We Know About Minimum Wages?mentioning

confidence: 99%

The effect of minimum wages on consumption in Canada

Jung

McFarlane

Das

2020

The Economic and Labour Relations Review

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“…Askenazy (2003) used internal growth model in his analysis and finds that the minimum wage contributes positively to economic growth, but it increases unemployment. Rybczynski and Sen (2018) analyze the impact of minimum wage on employment by using data from different states of Canada over the period 1981-2011. According to this study, a 10 % increase in minimum wages leads to a 1-4% decrease in youth employment.…”

Section: Empirical Literaturementioning

confidence: 99%

“…of minimum wages to mean earnings of full-time employees (OECD, 2018). Both variables are commonly used in the literature (Addison, Blacburn & Cotti, 2012;Card & Krueger, 1995;Kim & Lim, 2018;Rybczynski & Sen, 2018;Pantea, 2017;Askenazy, 2003;Brown, Gilroy & Kohen, 1982;Saltiel & Urzua, 2017) and it is possible to get this data from OECD statistical database. The employment to population ratio is used for employment variable.…”

Section: Data and Modelmentioning

confidence: 99%

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Minimum Wage and Employment: A Dynamic Heterogeneous Approach for OECD Countries

Kar¹,

Eğri²,

Aksunger³

2018

TUJISE

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The effect of minimum wage on employment is one of the most important matters discussed in economics literature however; the theoretical approaches put forward regarding the impact of minimum wage on employment indicate different outcomes. In this regard, the purpose of this paper is to empirically investigate the effect of minimum wage legislation on employment by employing data for OECD countries over the period 1997-2017 and to contribute to this literature where consensus has not yet been achieved on the subject. In order to conduct this investigation, the Augmented Mean Group Estimator has been used. According to empirical results, minimum wage legislation increases the employment in the long run for the OECD countries. On the other hand, these results show that a one percent increase in minimum wage leads to an increase of 0.17% in employment rate. Although country-specific coefficients vary between countries because of the institutional and structural characteristics of countries, they are mostly positive. These findings support the modern liberal approach, which suggests that the impact of minimum wage on employment is negligible or positive.

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“…LFS variables: age (age 6), school enrollment (schooln), hourly wage (hrlyearn). CPS variables: age, hourly wage (hourwage), school enrollment (schlcoll).2 SeeWascher and Neumark (2006),Neumark et al (2014) andRybczynski and Sen (2018) for reviews of the literature, andWang et al (2019) andCengiz et al (2019) for recent results.…”

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confidence: 99%