Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/236333 
Year of Publication: 
2021
Series/Report no.: 
IZA Discussion Papers No. 14302
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
New Zealand has seen dramatic changes in minimum wage policies since 2000. The adult minimum wage has increased 75% in CPI-adjusted real terms. In addition, the youth minimum wage was abolished in two stages, resulting in a 125% increase in the real minimum wage for 16–19-year-old workers. We review the motivations for minimum wages and the changes and analyse how they have affected workers outcomes. We find that the minimum wage now strongly determines the wages of teenage workers, with the minimum wage now at the median wage of teenagers, and over half of 16–17-year-olds, and about 40% of 18–19-year-olds, earning at or below the minimum. Although we find no clear evidence that increases in the minimum wage have led to adverse employment effects, we expect there are downside risks for youth and low skilled workers' employment. As minimum wage workers are broadly spread across the household income distribution, we conclude that minimum wages are largely ineffective as a redistributive income support policy.
Subjects: 
minimum wages
employment
earnings inequality
income inequality
JEL: 
J21
J23
J24
J31
J38
Document Type: 
Working Paper

Files in This Item:
File
Size
2.65 MB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.