Minimum Wages and Employment: An Overview of Empirical Evidence

Nodir Adilov

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DOI: 10.2190/CN.32.1.e

Abstract

Models of perfectly competitive labor markets imply that an increase in the minimum wage decreases employment, while the monopsony power labor market models suggest that higher minimum wages might increase employment. Since theoretical models of labor markets can support contradictory predictions, this article provides an overview of several key empirical studies on the effects of the minimum wage on employment and discusses the controversy related to the empirical methods and the findings.

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