The Impact of a Minimum‐Wage Increase on Temporary‐Contract Workers

Abstract

We study the impact of the 2016 increase in the Irish minimum wage on the hours worked and the probability of job loss of minimum‐wage workers. We pay particular attention to temporary‐contract workers, who may be more susceptible to changes to their working conditions than permanent employees. The results indicate that the increase in the minimum wage had a negative and statistically significant effect on the hours worked of minimum‐wage workers, with an average reduction of approximately 0.6 hours per week. For temporary workers, the effect was greater, with a decline of approximately 3 hours per week. We find no evidence that the increase in the minimum wage led to an increased probability of becoming jobless in the six‐month period following the rate change, nor did it affect employment shares in sectors employing large numbers of minimum‐wage workers.

The impact of the 2016 minimum wage increase on average labour costs, hours worked and employment in Irish firms

“…There is recent evidence showing a reduction in hours worked of minimum wage employees following the uprating or introduction of a minimum wage (see e.g. McGuinness and Redmond, 2019;Stewart and Swaffield, 2008).…”