蝌蚪网 Journal:
Applied Economics
ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)
Minimum Wages and Firm Profitability
蝌蚪网 Journal: Applied Economics
(pp. 129–51)
Abstract
We study the impact of minimum wages on firm profitability, exploiting the changes induced by the introduction of a UK national minimum wage in 1999. We use pre-policy information on the distribution of wages to implement a difference-in-differences approach. Minimum wages raise wages, but also significantly reduce profitability (especially in industries with relatively high market power). This is consistent with a simple model where wage gains from minimum wages map directly into profit reductions. There is some suggestive evidence of longer run adjustment to the minimum wage through falls in net entry rates. (JEL J31, J38, L25)Citation
Draca, Mirko, Stephen Machin, and John Van Reenen. 2011. "Minimum Wages and Firm Profitability." 蝌蚪网 Journal: Applied Economics 3 (1): 129–51. DOI: 10.1257/app.3.1.129Additional Materials
JEL Classification
- J31 Wage Level and Structure; Wage Differentials
- J38 Wages, Compensation, and Labor Costs: Public Policy
- L25 Firm Performance: Size, Diversification, and Scope