How will Countries like Sweden Benefit or Suffer from a Minimum Wage?

Sammanfattning: Recently the European Union proposed a “Fair minimum wage initiative”. The proposal is to create a common framework across the EU 28 member countries. However, the Nordic countries have rejected the proposal. We investigate this issue through a literature review. We start with a presentation of empirical research on the effects of a minimum wage. In the theoretical analysis we use the simple classical monopsony model and the model with frictions in our examination of minimum wage effect on welfare and labour market participation. The conclusion is mixed concerning effects from an introduction of minimum wage, depending on how the countries adopt and implement the minimum wage. If the countries government implemented minimum wage correctly using specific industry minimum wage, there is clear evidence for a positive effect.