Minimum Wage and Youth Employment in India: Does Raising Wages Help or Hurt Students Entering the Job Market?

India’s wage-setting framework is transitioning from a patchwork of state-level minimum wages under the Minimum Wages Act, 1948, to a unified system under the Code on Wages (2019), which introduces a central “floor wage.” In practice, India still operates with a non-binding national floor level minimum wage (NFLMW) of ₹178/day as a reference, while state rates vary by occupation, skill and region. This paper examines whether raising minimum wages helps or hurts students and recent school-leavers entering India’s job market. Building on canonical and contemporary economic theory, international evidence, and Indian labour market data (especially PLFS), I find: (1) moderate minimum-wage increases tend to raise earnings with small or ambiguous overall employment effects, but (2) displacement risks can be larger for marginal groups such as very young or less-experienced workers—unless policy is paired with complementary measures (apprenticeships, hiring incentives, skill-matching, and strict wage enforcement). For India, where youth unemployment (15–29) on the usual status measure has hovered near ~10–12% in recent years and educated youth unemployment remains high, a calibrated state-wise approach—keeping wage floors reasonable relative to local medians, coupled with active labour-market policies—offers the best chance to boost youth incomes without shrinking entry-level opportunities.