Follow us
Publications Commentary Research People Events News Resources and Videos About IFS
Home Publications Who pays for the minimum wage?

Who pays for the minimum wage?

Journal article | American Economic Review

This paper provides a comprehensive assessment of the margins along which firms responded toa large and persistent minimum wage increase in Hungary. We show that employment elasticitiesare negative but small even four years after the reform; that around 75 percent of the minimumwage increase was paid by consumers and 25 percent by firm owners; that firms responded to theminimum wage by substituting labor with capital; and that dis-employment effects were greater inindustries where passing the wage costs to consumers is more difficult. We estimate a model withmonopolistic competition to explain these findings.

More on this topic

Briefing note
Minimum wages can play an important role in raising living standards, and have become an important part of a government’s toolkit in addressing low pay.
IFS Working Paper WP19/26
Postgraduate degree holders experience lower cyclical wage variation than those with undergraduate degrees.
Report
This report estimates the impact on earnings of attending HE compared with not going. The authors detail how this varies by subject and institution of study, as well as how these returns vary by gender, prior educational attainment and the sorts of subjects individuals have studied up to age 18. ...
Journal article | Economica
We analyse the impact of nationally regulated pay on the quality of applicants to be police officers across England and Wales, exploiting a unique dataset of individual test scores from the national assessment required of all police applicants, and combining this with data on local labour markets ...
Presentation
In April, the Vancouver School is Economics hosted a free public lecture, The Accumulation of Human Capital: Research and Policy Questions, presented by Professor Orazio Attanasio of the University College London.