Employment Effect of Minimum Wages

Abstract

The effect of minimum wages on employment is a mature, continuously researched topic. This study discusses the core theoretical approaches on the relationship between the minimum wage and employment, which is reflected by the empirical results from the international literature. Moreover, it presents the findings of the most recent research and the results of meta-analyses of this issue. While the theoretical approaches and outcomes of empirical studies vary, the meta-analysis demonstrates the lack of a significant correlation between minimum wages and employment. In light of the latest developments and meta-regressions, the literature does not provide a clear and definite sign of the relationship, but the trend seems to be driven towards a negative direction of the impact for the more sensitive groups. Therefore, further light needs to be shed onto this issue.