The impact of minimum wage responses on job aspects
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School of Business |
Bachelor's thesis
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Authors
Date
2023
Department
Major/Subject
Mcode
Degree programme
Taloustiede
Language
en
Pages
24 + 8
Series
Abstract
The debate surrounding minimum wage changes often centres around their effects on wage and employment. The effects of minimum wage changes, however, are far more nuanced. In this literature review, I explore economic literature examining firms' responses to changes in minimum wage and the effects of those responses. The responses I assess are price pass-through and adjustments to fringe benefits, other job attributes, personnel policies, and production technology. In my analysis, I find evidence of firms offsetting increased labor costs with var-ious responses and of these responses counteracting the positive wage effects of minimum wage increases for minimum wage workers. In addition, I find evidence of ripple effects for non-minimum wage workers and of firms managing to offset labor costs in varying degrees.Description
Thesis advisor
Valmari, NelliKeywords
minimum wage, fringe benefits, non-wage compensation, ripple effects, monopsony, price pass-through