Minimum wage in Lebanon : its effect on food prices

Abstract

This paper tests whether a rise in minimum wage is passed on to consumers through an increase in food prices. Using weekly data from the ministry of agriculture in Lebanon for the time period ranging from 2007 till 2010, I study the impact of a minimum wage hike on prices of vegetables and fruits in Lebanon. The results showed that prices generally rise with changes in the minimum wage and this effect is approximately 10percent. Also the results suggest that adding dummies like Ramadan, lent and seasons (fall, spring, summer and winter) do not alter our findings.