Welfare Reform on the Web (June 2003): Minimum Wage - Overseas

MINIMUM WAGE, EXPORTS AND GROWTH

P. Askenazy

European Economic Review, vol. 47, 2003, p.147-164

Investigates the impact of minimum wages on the growth of an open, developed country. Finds minimum wages shift efforts from manufacturing to research and development sectors in an open economy. Long-term growth is speeded up in proportion to export levels. The welfare effect of minimum wages is debatable as unemployment increases. An examination of 11 OECD countries supports these statements.