The minimum wage and firm networks: Evidence from South Africa

Brandon Tan

No wp-2021-100, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: There is a large literature on the minimum wage focused on directly exposed firms and geographies. This paper provides new evidence that the minimum wage has significant spillover effects on firms exposed to the minimum wage indirectly via firm supply chains. Using administrative firm-level tax data from South Africa, we study the impact of the 50 per cent agricultural minimum wage hike in 2013 on the outcomes of firms downstream from the agriculture sector with an event study design. The minimum wage increased labour costs and prices in the agriculture sector.

Keywords: Minimum wage; Supply chains; Firms (search for similar items in EconPapers)
Date: 2021
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