Replication data for: Minimum Wages and Firm Profitability
Principal Investigator(s): View help for Principal Investigator(s) John Van Reenen; Stephen Machin; Mirko Draca
Version: View help for Version V1
| Name | File Type | Size | Last Modified |
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| AEJ | 08/03/2019 03:17:AM | ||
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text/plain | 14.6 KB | 08/02/2019 11:17:PM |
Project Citation:
Project Description
Summary:
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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)
Scope of Project
JEL Classification:
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J31 Wage Level and Structure • Wage Differentials
L25 Firm Performance: Size, Diversification, and Scope
J38 Public Policy
J31 Wage Level and Structure • Wage Differentials
L25 Firm Performance: Size, Diversification, and Scope
J38 Public Policy
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