Minimum wages and economic outcomes in Europe

In this paper we review the arguments and consider evidence on the economic effects of minimum wages in Europe. We begin by outlining the systems of minimum wages that currently operate in European countries and then consider some evidence on the economic effects of minimum wages in four countries (France, the Netherlands, Spain and the United Kingdom). We consider the relation between minimum wage floors and two economic outcomes, employment and the distribution of income in working households. We find little evidence that minimum wages have a bad effect on jobs and some evidence that they have an equalising impact on the distribution of income among families with someone in work. (C) 1997 Elsevier Science B.V.