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Research papers on The minimum wage and jobs

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  1. The Effect of Minimum Wages on Low-Wage Jobs*

    Doruk Cengiz, Arindrajit Dubé, Attila Lindner, et al. · 2019 · The Quarterly Journal of Economics · 2,628 citations

    Abstract We estimate the effect of minimum wages on low-wage jobs using 138 prominent state-level minimum wage changes between 1979 and 2016 in the United States using a difference-in-differences approach. We first estimate the effect of the minimum wage increase on employment changes by wage bins throughout the hourly wage distribution. We then focus on the bottom part of the wage distribution and compare the number of excess jobs paying at or slightly above the new minimum wage to the missing jobs paying below it to infer the employment effect. We find that the overall number of low-wage jobs remained essentially unchanged over the five years following the increase. At the same time, the d

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  2. Trends in U.S. Wage Inequality: Revising the Revisionists

    David Autor, Lawrence F. Katz, Melissa S. Kearney · 2008 · The Review of Economics and Statistics · 2,416 citations

    A recent “revisionist” literature characterizes the pronounced rise in U.S. wage inequality since 1980 as an “episodic” event of the first half of the 1980s driven by nonmarket factors (particularly a falling real minimum wage) and concludes that continued increases in wage inequality since the late 1980s substantially reflect the mechanical confounding effects of changes in labor force composition. Analyzing data from the Current Population Survey for 1963 to 2005, we find limited support for these claims. The slowing of the growth of overall wage inequality in the 1990s hides a divergence in the paths of upper-tail (90/50) inequality—which has increased steadily since 1980, even adjusting

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  3. Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties

    Arindrajit Dubé, T. William Lester, Michael Reich · 2010 · The Review of Economics and Statistics · 1,236 citations

    We use policy discontinuities at state borders to identify the effects of minimum wages on earnings and employment in restaurants and other low-wage sectors. Our approach generalizes the case study method by considering all local differences in minimum wage policies between 1990 and 2006. We compare all contiguous county pairs in the United States that straddle a state border and find no adverse employment effects. We show that traditional approaches that do not account for local economic conditions tend to produce spurious negative effects due to spatial heterogeneities in employment trends that are unrelated to minimum wage policies. Our findings are robust to allowing for long-term effect

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  4. Employment Effects of Minimum and Subminimum Wages: Panel Data on State Minimum Wage Laws

    David Neumark, William Wascher · 1992 · Industrial and Labor Relations Review · 607 citations

    Using panel data on state minimum wage laws and economic conditions for the years 1973–89, the authors reevaluate existing evidence on the effects of a minimum wage on employment. Their estimates indicate that a 10% increase in the minimum wage causes a decline of 1–2% in employment among teenagers and a decline of 1.5–2% in employment for young adults, similar to the ranges suggested by earlier time-series studies. The authors also find evidence that youth subminimum wage provisions enacted by state legislatures moderate the disemployment effects of minimum wages on teenagers.

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  5. Effects of the Minimum Wage on Employment Dynamics

    Jonathan Meer, Jeremy West · 2015 · The Journal of Human Resources · 443 citations

    The voluminous literature on minimum wages offers little consensus on the extent to which a wage floor impacts employment. We argue that the minimum wage will impact employment over time, through changes in growth rather than an immediate drop in relative employment levels. We show that commonly-used specifications in this literature, especially those that include state-specific time trends, will not accurately capture these effects. Using three separate state panels of administrative employment data, we find that the minimum wage reduces job growth over a period of several years. This finding is supported using several empirical specifications.

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  6. The Effects of Minimum Wages on Wage Dispersion and Employment: Evidence from the U.K. Wages Councils

    Stephen Machin, Alan Manning · 1994 · Industrial and Labor Relations Review · 238 citations

    Using data on Wages Council coverage from the United Kingdom New Earnings Survey, the authors examine the impact of mandated minimum wages on wage dispersion and employment in the United Kingdom in the 1980s. They find evidence that a dramatic decline in the toughness of the regulation imposed by the Wages Councils through the 1980s—a decline, that is, in the level of the minimum wage relative to the average wage—significantly contributed to widening wage dispersion over those years. There is, however, no evidence of an increase in employment resulting from the weakening bite of the Wages Council minimum pay rates. Instead, consistent with the conclusions of several recent U.S. studies, the

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  9. Minimum Wage Employment Effects and Labor Market Concentration

    José Azar, Emiliano Huet-Vaughn, Ioana Marinescu, et al. · 2019 · National Bureau of Economic Research · 71 citations

    Why is the employment effect of the minimum wage frequently found to be close to zero? Theory tells us that when wages are below marginal productivity, as with monopsony, employers are able to increase wages without laying off workers, but systematic evidence directly supporting this explanation is lacking. In this paper, we provide empirical support for the monopsony explanation by studying a key low-wage retail sector and using data on labor market concentration that covers the entirety of the United States with fine spatial variation at the occupation-level. We find that more concentrated labor markets - where wages are more likely to be below marginal productivity - experience significan

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  10. Minimum Wage Employment Effects and Labour Market Concentration

    José Azar, Emiliano Huet-Vaughn, Ioana Marinescu, et al. · 2023 · The Review of Economic Studies · 71 citations

    Abstract This paper shows that more highly concentrated labour markets experience more positive employment effects of the minimum wage. In the most concentrated labour markets, employment rises following a minimum wage increase. The paper establishes its main findings by studying the effects of local minimum wage increases on a key low-wage retail sector, and using data on labour market concentration that covers the entirety of the U.S. with fine spatial variation at the occupation level. The results carry over to the fast-food sector and the entire low-wage labour market and are robust to using proxies of labour market concentration available for a broader range of industries, such as the n

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  13. MINIMUM WAGE EFFECTS ON PERMANENT VERSUS TEMPORARY MINIMUM WAGE EMPLOYMENT

    MICHELE CAMPOLIETI, MORLEY GUNDERSON, BYRON LEE · 2014 · Contemporary Economic Policy · 9 citations

    We estimate the effect of minimum wages on employment using the Master Files of the Canadian Labour Force Survey over the recent period 1997–2008. Particular attention is paid to the differences between permanent and temporary minimum wage workers—an important distinction not made in the existing literature. Our estimates for permanent and temporary minimum wage workers combined are at the lower end of estimates based on Canadian studies estimated over earlier time periods, suggesting that the adverse employment effects are declining over time for reasons discussed. Importantly, the adverse employment effects are substantially larger for permanent compared to temporary m

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  17. Effects of Minimum Wage Increases on Employment in Lithuania

    Mykolas Šuminas · 2015 · Ekonomika · 1 citations

    From the advent of minimum wage it was subject to controversy: economists did not agree on its effects on the state of the economy, the welfare of both firms and workers. Empirical academic literature usually investigates employment reaction to the minimum wage fluctuations. Regrettably, such papers do not exist for Lithuania, so the literature of similar scope and topic of the US and UK (along with several other countries) is explored in this paper.The effect of the Lithuanian real minimum wage on aggregate employment is estimated by using time series models. Dependant on the specification, the real minimum wage elasticity is estimated to be –0.03–0.03 yet statically insignificant in all of

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