The elusive employment effect of the minimum wage

Produced by: 
London School of Economics
Available from: 
November 2020
Paper author(s): 
Alan Manning

It is hard to find a negative effect on employment effect of rises in the minimum wage: the elusive employment effect. It is much easier to find an impact on wages. This paper argues the elusive employment effect is unlikely to be solved by better data, methodology or specification. The reason for the elusive employment effect is that there are reason why the link between higher minimum wages and higher labor costs are weaker than one might think and because imperfect competition is pervasive in the labor market.


Research section: 
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