The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Minimum Wages

  • Donald O. Parsons
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_967

Abstract

The minimum wage, the lowest wage rate legally payable by employers to workers, derives support from concern about the equity of market processes. Because employment may fall in response to an increase in the minimum wage and because the majority of low-wage workers do not come from families in poverty, the minimum wage may have modest benefits as a poverty reduction tool. While there are variations across studies, evidence from the United States suggests that the economy-wide employment effects of wage minimums at the levels at which they have been implemented in the United States are negative but not large.

Keywords

Envelope theorem Hours worked Labour market participation Labour supply Minimum wages Poverty alleviation Unemployment 

JEL Classifications

J3 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Donald O. Parsons
    • 1
  1. 1.