The determinants of minimum wage rates

This paper attempts to test the degree of responsiveness of Canadian provincial governments to different political groups in establishing their relative minimum wage policies over the 1975–1982 period. It discusses alternative explanations of minimum wage policies and focuses on the political market approach, where women, youth, small business and unions play a role. An econometric model is specified and estimated on pooled annual time series and cross-section data for nine provinces in Canada. The results tend to support most of the hypotheses.