Employment Effects of Minimum Wages: Evidence from a Quasi‐Experiment

Andrew Leigh

Australian Economic Review, 2003, vol. 36, issue 4, 361-373

Abstract: To estimate the impact of raising the minimum wage on employment, this article uses a natural experiment, arising from six increases in the Western Australian statutory minimum wage during the period 1994–2001. Relative to the rest of Australia, the employment to population ratio in Western Australia fell following each of the six rises, twice by a statistically significant margin. Aggregating the increases, the elasticity of labour demand with respect to the Western Australian statutory minimum wage is found to be −0.13.

Date: 2003
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