We assess the impact of nationwide minimum wages on employment throughout the whole wage distribution by exploiting geographical variation in the level of wages. We find a substantial increase in wages at the bottom of the wage distribution, while we detect a small, statistically insignificant negative effect on employment. Combining the estimated change in the wage distribution with a tax and benefit microsimulation model, we show that the minimum wage generates considerable proportional income gains up to the middle of the household income distribution.
Authors
Giulia Giupponi
Giulia, an Assistant Professor of Economics at Bocconi University, studies the employment and welfare effects of social insurance and minimum wages.
Robert Joyce
Robert is a Deputy Director. His work focuses on primarily on the labour market, income and wealth inequality, and the design of the welfare system.
Attila Lindner
Attila is an IFS Research Fellow, an Associate Professor of Economics at the University College London and Adjust Professor at the University of Oslo.
Tom Waters
Tom is an Associate Director at the IFS and Head of the Income, Work and Welfare sector.
Tom Wernham
Tom is a Research Economist in the Income, Work and Welfare sector, having joined the IFS in 2020.
Xiaowei Xu
Xiaowei joined the IFS in 2018 and works in the Income, Work and Welfare sector.
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