Work detail

A Meta-Analysis of the Effect of Minimum Wage Increases on Prices

Author: Mgr. Jana Vavřičková
Year: 2015 - summer
Leaders: doc. PhDr. Tomáš Havránek Ph.D.
Work type: Finance, Financial Markets and Banking
Language: English
Pages: 77
Awards and prizes:
Abstract: As an economically as well as politically sensitive topic, labor market interventions stir up discussions
among professionals as well as general public. Most economists take negative stance against minimum
wage policies providing arguments backed by theoretical reasoning rather then sound empirical
evidence. Knowledge of labor market outcomes and their transmission channel to other segments of the
economy are till nowadays limited and inconsistent. Neither empirical research in the field contributes to
a uniform consent on the impact of minimum wage hikes on the price level. Moreover, the reported
estimates display large heterogeneity and after a brief inspection reveal that the field is infested with
publication selectivity. A uniquely constructed dataset consisting of 469 estimates of the price effect of
minimum wage changes and their associated characteristics is analyzed using a set of statistical tools
generally known as meta-analysis. The method is a powerful tool nowadays widely used in empirical
research to synthesize and systematically evaluate sometimes inconsistent research results. While the
study finds no consistent evidence of an actual link between minimum wage hikes and inflationary
pressures, the empirical results show strong presence of publication selectivity




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