The impact of a minimum wage increase on employment : evidence from Ireland

The minimum wage in Ireland increased every year from 2016 to 2025. We investigate whether these minimum wage increases led to a higher likelihood of minimum wage employees becoming unemployed or inactive. To do this, we implement a difference-in-differences methodology that compares the changes in employment outcomes of minimum wage employees to higher-paid employees up to six months following a minimum wage change. We find no evidence that recent minimum wage increases in Ireland increased the likelihood of minimum wage employees losing their jobs. While minimum wage employees are generally more likely to enter non-employment than higher-paid workers, the likelihood of this happening did not increase following increases to the minimum wage. Furthermore, no pattern emerges with respect to the magnitude of the minimum wage increase. In some years, the minimum wage increase was relatively large, while in other years it was small. However, larger minimum wage increases over this period did not coincide with a higher likelihood of minimum wage employees entering non-employment.