Minimum Wage Law and Its Effects on Labor Force Supply And Demand from Micro and Macroeconomics Perspectives

The review of literature shows different studies have reported vague and contradictory results of the impact of minimum wage on the rate of labor force supply and demand in micro and macroeconomic level. This study besides reviewing the experimental studies, investigates the effect of legislating minimum wage on labor force supply and demand from micro and macroeconomic perspectives in both long and short spans of time. The results of this study show the theoretical models are based on the assumptions which are not applicable to actual world of economy. Besides, the results revealed that the vague and contradictory results of the extant literature are due to ignoring the theoretical requirements.