New ESRI research shows that recent increases to the minimum wage in Ireland did not lead to low-paid workers losing their jobs

March 31, 2026

Labour Markets and Skills
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The minimum wage in Ireland increased every year from 2016 to 2025. A key concern for minimum wage policy is whether raising the minimum wage causes low paid workers to lose their jobs. This could occur if employers reduce their workforce due to higher labour costs. A new ESRI study funded by the Low Pay Commission examines whether minimum wage employees became jobless in the six-month period following a minimum wage increase.

Key findings:

  • There is 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 become unemployed than higher paid workers, the likelihood of this happening did not increase following increases to the minimum wage.
  • 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 becoming unemployed.
  • It is important to acknowledge that the minimum wage increases that we focus on in this study coincided with a period of strong economic growth and low unemployment. It is possible that similar policy changes could generate different outcomes if enacted during a period of weaker economic performance.

The study also examines the employment of workers in receipt of sub-minimum youth wage rates. In Ireland, employees aged under 20 years can be paid less than the full adult minimum wage. This means that young minimum wage employees can “age into” a higher minimum wage band. For example, an employee aged 18 is entitled to 80 percent of the full adult minimum wage rate. Upon turning 19, they are entitled to 90 percent of the full rate, and upon turning 20, they are entitled to the full adult minimum wage rate. The study examines whether employees that ‘age into’ a higher minimum wage are more likely to lose their jobs than young employees whose age, and wage, stay the same.


Key findings:

  • Overall, young workers that ‘age into’ a higher minimum wage band did not experience an increased likelihood of job loss following their birthday.

  • While youth minimum wage rates were rarely used in the past, there appears to be an increasing reliance on them by employers. In 2019, for example, less than 20 percent of employees under 20 years of age were paid a sub-minimum youth wage. However, this had increased to 30 percent in 2025. It is possible that employers are increasingly using sub-minimum youth wage rates to keep labour costs low as the minimum wage gets higher.

    Dr Paul Redmond, an author of the report, said:

    “It is important to monitor whether increases to the minimum wage result in negative employment effects for low paid workers. In this study, we find that recent minimum wage increases, which occurred during a period of strong economic growth and low unemployment, did not increase the likelihood of minimum wage employees losing their jobs.” 

Ultan Courtney, Chairperson of the Low Pay Commission, commented:

“I welcome the publication of this important research paper on the effects of minimum wage increases on employment in Ireland, produced through the research partnership between the Low Pay Commission and the ESRI.

The Low Pay Commission values the depth of this research and its strong evidence-based approach.

The Commission strives at all times to make evidence-based recommendations. Our work relies on rigorous, data driven research and this research provides valuable insights into the effects of increases in the minimum wage. The research will support our discussions as we prepare our recommendation to Government on the 2027 minimum wage.”