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Borgschulte, Mark, Heepyung Cho & Darren Lubotsky (2026): Immigrants at the Margin: Labor Market Effects of the Minimum Wage. (RF Berlin - CReAM Discussion Paper Series 2026,103), Berlin, 44 S.

Abstract

"We examine the differential effects of minimum wages on immigrant and native workers in the United States. We find that minimum wage increases lead to reduced hours of work among immigrants with no effect on their employment. The effects are concentrated among recently-arrived, likely-undocumented workers in high turnover industries. Native workers show no such response, even when examining native subgroups with similar characteristics to the most affected immigrants. We conclude that affected immigrant labor markets feature low-surplus, low-investment employment relationships with flexible hours, but they are embedded in labor markets where replacement is unusually costly." (Author's abstract, IAB-Doku) ((en))

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Clemens, Jeffrey & Michael R. Strain (2026): The heterogeneous effects of large and small minimum wage changes on hours worked: Evidence using a partially pre-committed analysis plan. In: Economics Letters, Jg. 262. DOI:10.1016/j.econlet.2026.112852

Abstract

"We use a partially pre-committed estimation strategy to study the effects of minimum wage increases on hours worked. Analyzing CPS and ACS data from 2011–2019, we estimate that relatively large minimum wage increases reduced usual hours worked per week among individuals with low levels of experience and education by just under one hour per week during the decade prior to the onset of the Covid-19 pandemic, while the effects of smaller minimum wage increases are economically and statistically indistinguishable from zero. Because we follow the same pre-committed analysis plan as Clemens and Strain’s (forthcoming) analysis of employment, we can directly compare the resulting employment and hours elasticities. We find that these elasticities were very similar in our empirical context." (Author's abstract, IAB-Doku, © 2026 Elsevier B.V. All rights are reserved, including those for text and data mining, AI training, and similar technologies.) ((en))

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Davies, Michael, R. Jisung Park & Anna Stansbury (2026): Minimum Wages and Workplace Injuries. (Upjohn Institute working paper 428), Kalamazoo, Mich., 62 S., App. DOI:10.17848/wp26-428

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Guillen Sanchez, Jorge, Jose Alberto Molina & Jose Ignacio Gimenez-Nadal (2026): Minimum Wage and Parental Childcare Time in the USA, 2019-2023. (MPRA paper / University Library of Munich 127777), München, 33 S.

Abstract

"Recent economic literature suggests that increases in the minimum wage can lead to parents spending more time in childcare through easing financial constraints such as the income effect. However, most evidence from past research does not analyse the disruptions of the COVID 19 pandemic. This research examines the impact of state-level minimum wage increases on parental childcare time in the United States during the mentioned period of 2019 to 2023. Through the use of microdata from the American Time Use Survey (ATUS), we analyse a sample of 4043 working age parents and find that, contrary to findings from the 2003 to 2019 period, there is no statistical-ly significant effect on childcare time across aggregate or subgroup specifications, including mothers, fathers and low education parents among others. This null result diverges from pre-2019 literature. We attribute this lack of significance to the unique structural rigidities of the post-pandemic labor market (2019–2023) and the erosion of real wages due to high inflation, which likely neutralized the behavioral incentives typically associated with wage floors." (Author's abstract, IAB-Doku) ((en))

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Rao, Nirupama L. & Max Risch (2026): Who’s Afraid of the Minimum Wage? Measuring the Impacts on Independent Businesses Using Matched U.S. Tax Returns. In: The Quarterly Journal of Economics, Jg. 141, H. 1, S. 373-427. DOI:10.1093/qje/qjaf053

Abstract

"A common concern surrounding minimum wage policies is their impact on independent businesses, which are often feared to be less able to bear or pass on cost increases. We examine how these typically small and medium-size firms accommodate minimum wage increases along product and labor market margins using a matched owner-firm-worker panel data set drawn from the universe of U.S. tax records over a 10-year period, and using state minimum wage changes as identifying variation. We find that on average, firms in highly exposed industries do not substantially reduce employment—they do not lay off workers but moderately reduce part-time hiring. Instead, these firms are able to fully finance the new labor costs with new revenues, leaving average owner profits unchanged. Higher wage floors, however, forestall entry, particularly for less productive firms, reducing the number of independent firms operating in these industries by roughly 2%. Yet these industries do not shrink; instead, incumbent responses and strong positive selection among entrants reshape industries that rely heavily on low-wage workers, yielding fewer but more productive firms after the cost shock. We also take a worker-level perspective to examine how potentially vulnerable individuals are affected by minimum wage increases. Using panels of low-earning and young workers, we find that their average earnings rise substantially with the minimum wage, while they are no less likely to be employed. Worker transitions indicate that minimum wage increases boost retention and that worker reallocation from independent firms toward corporations buffers disemployment impacts from reduced hiring at independent firms." (Author's abstract, IAB-Doku) ((en))

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Berger, David, Kyle Herkenhoff & Simon Mongey (2025): Minimum Wages, Efficiency, and Welfare. In: Econometrica, Jg. 93, H. 1, S. 265-301. DOI:10.3982/ecta21466

Abstract

"Many argue that minimum wages can prevent efficiency losses from monopsony power. We assess this argument in a general equilibrium model of oligopsonistic labor markets with heterogeneous workers and firms. We decompose welfare gains into an efficiency component that captures reductions in monopsony power and a redistributive component that captures the way minimum wages shift resources across people. The minimum wage that maximizes the efficiency component of welfare lies below $8.00 and yields gains worth less than 0.2% of lifetime consumption. When we add back in Utilitarian redistributive motives, the optimal minimum wage is $11 and redistribution accounts for 102.5% of the resulting welfare gains, implying offsetting efficiency losses of −2.5%. The reason a minimum wage struggles to deliver efficiency gains is that with realistic firm productivity dispersion, a minimum wage that eliminates monopsony power at one firm causes severe rationing at another. These results hold under an EITC and progressive labor income taxes calibrated to the U.S. economy." (Author's abstract, IAB-Doku) ((en))

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Blau, Francine D., Isaac Cohen, Matthew Comey, Lawrence Kahn & Nikolai Boboshko (2025): The Minimum Wage and Inequality Between Groups. (CESifo working paper 12371), München, 50 S.

Abstract

"Using 1979-2019 Current Population Survey data, we study the effect of state and federal minimum wage policies on gender, race, and ethnic inequality. We find that minimum wages substantially reduce intergroup wage inequality at least up to the 20th wage percentile, with no evidence of adverse employment effects. We conduct counterfactual simulations of between-group inequality due to minimum wage changes since 1979. Declines in the real minimum wage in the 1980s slowed progress in narrowing between-group inequality. Relatively small changes in minimum wages during 1989-1998 and 1998-2007 meant little role for the minimum wage over those time spans. Since 2007, several states have steeply raised their minimum wages, especially raising Hispanics' relative wages, because they earn low wages and reside disproportionately in those states. Finally, we find that raising the federal minimum wage to $12/hour in 2020 dollars ($14.49 in 2025Q2 dollars) would reduce existing between-group wage gaps below the 15th percentile by 25-50%." (Author's abstract, IAB-Doku) ((en))

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Burkhauser, Richard V., Drew McNichols & Joseph J. Sabia (2025): Minimum Wages and Poverty: New Evidence from Dynamic Difference-in-Differences Estimates. In: The Review of Economics and Statistics, S. 1-53. DOI:10.1162/rest_a_01590

Abstract

"This study re-examines Dube (2019), which finds large and statistically significant poverty-reducing effects of the minimum wage. We show that his estimated elasticities are fragile and sensitive to (1) time period under study, (2) choice of macroeconomic controls, (3) limiting counterfactuals to geographically proximate states (“close controls”), which poorly match treatment states' pre-treatment poverty trends, and (4) accounting for potential bias caused by heterogeneous and dynamic treatment effects. Using data spanning nearly four decades from the March Current Population Survey and a dynamic difference-in-differences (DiD) approach, we find that a 10 percent increase in the minimum wage is associated with a (statistically insignificant) 0.17 percent increase in the probability of longer-run poverty among all persons. With 95% confidence, we can rule out long-run poverty elasticities with respect to the minimum wage of less than -0.129. Our null results persist across a variety of DiD estimation strategies, including two-way fixed effects, stacked DiD, Callaway and Sant'Anna, and synthetic DiD. We conclude that, to date, the preponderance of evidence suggests that minimum wage increases are an ineffective policy strategy for alleviating poverty." (Author's abstract, IAB-Doku, © MIT Press Journals) ((en))

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Chan, Marc K. & Akbar Zamanzadeh (2025): Minimum wage and employment in the U.S.: an application of Bayesian quantile kink regression. In: Econometric Reviews, Jg. 44, H. 6, S. 673-695. DOI:10.1080/07474938.2025.2451339

Abstract

"We examine whether the employment effects of minimum wage depend on unknown tipping points in the labor market. We apply a continuous threshold regression model—regression kink with unknown thresholds—to U.S. state-level panel data in 1993–2016 to estimate the tipping point and quantile employment effects. Overall, we find that the marginal effect is near-zero or mildly negative below the tipping point, and it is considerably more negative above it. The tipping occurs at 50–55% of the state’s median wage among women and 40–45% among men. Simulations of minimum wage reforms reveal nonlinear and asymmetric employment effects." (Author's abstract, IAB-Doku) ((en))

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Chiswick, Barry, Hope Corman, Dhaval M. Dave & Nancy Reichman (2025): Effects of the Minimum Wage on Employment of Young Adults with Cognitive Disabilities. (NBER working paper / National Bureau of Economic Research 33990), Cambridge, Mass, 43 S.

Abstract

"This study analyzes, for the first time, the effect of increases in the minimum wage on the labor market outcomes of working age adults with cognitive disabilities, a vulnerable and low-skilled sector of the actual and potential labor pool. Using data from the American Community Survey (2008-2023), we estimated effects of the minimum wage on employment, labor force participation, weeks worked, and hours worked among working age individuals with cognitive disabilities using a generalized difference-in-differences research design. We found that a higher effective minimum wage leads to reduced employment and labor force participation among individuals with cognitive disabilities but has no significant effect on labor supply at the intensive margin for this group. Adverse impacts were particularly pronounced for those with lower educational attainment. In contrast, we found no significant labor market effects of an increase in the minimum wage for individuals with physical disabilities or in the non-disabled population." (Author's abstract, IAB-Doku) ((en))

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Clemens, Jeffrey & Michael R. Strain (2025): The Heterogeneous Effects of Large and Small Minimum Wage Changes on Hours Worked: Evidence Using a Partially Pre-Committed Analysis Plan. (IZA discussion paper / Forschungsinstitut zur Zukunft der Arbeit 17913), Bonn, 69 S.

Abstract

"In a study of recent minimum wage changes (Clemens and Strain, forthcoming), we demonstrate how analyses of longer-run impacts of policy interventions can be pre-specified as extensions to very short-run analyses. This paper uses this novel methodology to study the effects of minimum wage increases on hours worked. Analyzing CPS and ACS data with the empirical specifications from our partially pre-committed analysis plan, we estimate that relatively large minimum wage increases reduced usual hours worked per week among individuals with low levels of experience and education by just under one hour per week during the decade prior to the onset of the Covid-19 pandemic. Our estimates of the effects of relatively small minimum wage increases vary across data sets and specifications but are, on average, both economically and statistically indistinguishable from zero. We estimate that the elasticity of hours worked with respect to the minimum wage is substantially more negative for large minimum wage increases than for small increases." (Author's abstract, IAB-Doku) ((en))

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Clemens, Jeffrey, Melissa D. Gentry & Jonathan Meer (2025): Divergent Paths: Differential Impacts of Minimum Wage Increases on Individuals with Disabilities. (NBER working paper / National Bureau of Economic Research 33437), Cambridge, Mass, 39 S.

Abstract

"We analyze the differential effects of minimum wage increases on individuals with disabilities using data from the American Community Survey and leveraging state-level minimum wage variation during the 2010s. We find that large minimum wage increases significantly reduce employment and labor force participation for individuals of all working ages with severe disabilities. These declines are accompanied by a downward shift in the wage distribution and an increase in public assistance receipt. By contrast, we find no employment effects for all but young individuals with either non-severe disabilities or no disabilities. Our findings highlight important heterogeneities in minimum wage impacts, raising concerns about labor market policies' unintended consequences for populations on the margins of the labor force." (Author's abstract, IAB-Doku) ((en))

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Clemens, Jeffrey & Michael Strain (2025): The eterogeneous Effects of Large and Small Minimum Wage Changes: Evidence Using a Partially Pre-Committed Analysis Plan. In: Journal of labor economics. DOI:10.1086/736552

Abstract

"This paper advances the use of partially pre-committed analysis plans in non-experimental research settings. In a study of recent minimum wage changes, we demonstrate how analyses of longer-run impacts of policy interventions can be pre-specified as extensions to very short-run analyses. Further, our pre-analysis plan includes comparisons of the effects of large vs.small minimum wage increases, which is a theoretically motivated dimension ofheterogeneity. We discuss how these use cases harness the strengths of pre-analysis planswhile mitigating their weaknesses. This project’s initial analyses explored CPS and ACS datafrom 2011 through 2015. Alongside these analyses, we pre-committed to analysesincorporating CPS and ACS data extending through 2019. Averaging across thespecifications in our pre-analysis plan, we estimate that relatively large minimum wage increases reduced employment rates among individuals with low levels of experience andeducation by just over 2 and a half percentage points during the decade prior to the onset ofthe Covid-19 pandemic. Our estimates of the effects of relatively small minimum wage increases vary across data sets and specifications but are, on average, both economically and statistically indistinguishable from zero. We estimate that the elasticity of employment with respect to the minimum wage is substantially more negative for large minimum wage increases than for small increases." (Author's abstract, IAB-Doku) ((en))

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Clemens, Jeffrey, Olivia Edwards & Jonathan Meer (2025): Did California's Fast Food Minimum Wage Reduce Employment? (NBER working paper / National Bureau of Economic Research 34033), Cambridge, Mass, 31 S.

Abstract

"We analyze the effect of California's $20 fast food minimum wage, which was enacted in September 2023 and went into effect in April 2024, on employment in the fast food sector. In unadjusted data from the Quarterly Census of Employment and Wages, we find that employment in California's fast food sector declined by 2.7 percent relative to employment in the fast food sector elsewhere in the United States from September 2023 through September 2024. Adjusting for pre-AB 1228 trends increases this differential decline to 3.2 percent, while netting out the equivalent employment changes in non-minimum-wage-intensive industries further increases the decline. Our median estimate translates into a loss of 18,000 jobs in California's fast food sector relative to the counterfactual." (Author's abstract, IAB-Doku) ((en))

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García, Jorge Luis, Patrick L. Warren & L. Reed Watson (2025): Basic Income and the Dynamics of Employment and Human Capital in a Non-Urban Disadvantaged Setting. (NBER working paper / National Bureau of Economic Research 33891), Cambridge, Mass, 54 S.

Abstract

"Why and when could basic income inhibit employment? We randomize 200 dollars of basic income per month for two years within a non-urban disadvantaged sample tracked using high-frequency administrative data. The amount provided is 21% of average all-source income. In the short term (0.5 years after baseline), relative to the control group, treatment-group employment decreases by 58%, average all-source income remains constant, and health-investment rates increase. In the longer term (1.25 years after baseline), employment and health-investment rates revert to their control-group counterparts. Treatment participants receive basic income, take time off work, address health needs, and, subsequently, reintegrate into employment." (Author's abstract, IAB-Doku) ((en))

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Jha, Priyaranjan, Jyotsana Kala, David Neumark & Antonio Rodriguez-Lopez (2025): City Size, Monopsony, and the Employment Effects of Minimum Wages. (NBER working paper / National Bureau of Economic Research 33862), Cambridge, Mass, 28 S.

Abstract

"We assess how minimum wage effects on restaurant employment in the U.S. vary with labor market size and monopsony power. Using city-level data, we construct monopsony proxies based on labor flows and concentration. Minimum wages bind less in larger cities, consistent with the urban wage premium, and omitting this relationship overstates how labor market power reduces adverse employment effects of minimum wages. Nonetheless, accounting for city size, lower job market fluidity is linked to weaker negative employment effects, consistent with search models. By contrast, traditional concentration measures do not consistently predict variation in the effects of minimum wages." (Author's abstract, IAB-Doku) ((en))

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Kim, Jiyoon, Michael Levere & Ellen Magenheim (2025): Do minimum wage increases induce changes in work behavior for people with disabilities? Evidence from the AbilityOne program. In: Labour Economics, Jg. 92. DOI:10.1016/j.labeco.2024.102663

Abstract

"We provide the first evidence on the effects of minimum wage increases on labor market outcomes for people with disabilities. We use a novel dataset consisting of quarterly data on employment, earnings, and hours for workers at nonprofit firms that participate in the federal AbilityOne program. The nonprofits in this program are offered advantages in government contracting, though must primarily employ workers with disabilities. Using recent local variation in minimum wage changes, we find that increasing the minimum wage does not affect employment outcomes for workers with disabilities in this specific context, with precisely estimated null effects. However, these nonprofits respond along non-employment related margins after relatively large minimum wage increases." (Author's abstract, IAB-Doku, © 2024 Elsevier B.V. All rights are reserved, including those for text and data mining, AI training, and similar technologies.) ((en))

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Kudlyak, Marianna, Murat Tasci & Didem Tüzemen (2025): Minimum wage increases and vacancies. In: Labour Economics, Jg. 97. DOI:10.1016/j.labeco.2025.102765

Abstract

"We use a unique data set and a novel identification strategy to estimate the effect of minimum wage increases on vacancy postings. Utilizing occupation-specific county-level vacancy data from the Conference Board ’s Help Wanted Online for 2005-18, we find that state-level minimum wage increases lead to substantial declines in existing and new vacancy postings in occupations with a larger share of workers earning close to the effective minimum wage. We estimate that a 10 percent increase in the state-level effective minimum wage reduces vacancies in these occupations relative to the rest by 2.4 percent in the same quarter, and the cumulative effect is as large as 4.5 percent a year later. Focusing on vacancies rather than employment allows us to highlight changes in firms’ hiring intentions in response to minimum wage increases. Coupled with the earlier U.S. evidence showing reductions in separations following minimum wage hikes, our finding of declining vacancies contributes to the broader empirical literature suggesting negligible effects of minimum wage increases on net employment." (Author's abstract, IAB-Doku, © 2025 Published by Elsevier B.V.) ((en))

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Melo, Vitor C., Christopher Kaiser, David Neumark, Liya Palagashvili & Michael D. Farren (2025): Minimum Wage Laws and Job Search. (NBER working paper / National Bureau of Economic Research 33433), Cambridge, Mass, 37 S.

Abstract

"A large theoretical literature on job search predicts that a higher minimum wage will increase the number of job seekers for affected jobs, which can lead to more job creation and higher employment. This paper uses novel data on job search in all U.S. states to examine the effect of minimum wage increases on the number of job seekers for low-skilled positions. We find no evidence that higher minimum wages increase job search for low-skilled jobs. Instead, the evidence suggests that higher minimum wages decrease the number of workers seeking employment." (Author's abstract, IAB-Doku) ((en))

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Miller, Stephen, Gary A. Wagner & Alicia Plemmons (2025): Employment effects of minimum wage indexing: Establishment evidence from Oregon restaurants. In: Economic Inquiry, Jg. 63, H. 3, S. 681-714. DOI:10.1111/ecin.13284

Abstract

"Though 18 states will index their minimum wage to the Consumer Price Index by 2025, few studies have examined indexing's differential employment effects. Leveraging a period of stability in minimum wages (2000–2007) and two distinct national geocoded databases of establishments, we explore how indexing affected employment in Oregon restaurants, one of the earliest indexing states (2003). Nearest-neighbor matching is used as a preprocessing step before regression, pairing individual restaurants in Oregon to restaurants with similar characteristics in states where the minimum wage was unchanged. We find evidence that establishment employment falls 3.6% after indexing, implying an employment elasticity of −0.18." (Author's abstract, IAB-Doku, Published by arrangement with John Wiley & Sons) ((en))

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Sadowski, Katharine C. (2025): The Effect of the Minimum Wage on Childcare Establishments. (Working papers / U.S. Census Bureau, Center for Economic Studies 2025-53), Washington, DC, 90 S.

Abstract

"Childcare is essential for working families, yet it remains increasingly unaffordable and inaccessible for parents and offers poverty-level wages to many employees. While research suggests minimum wage policies may improve the welfare of low-wage workers, there is also evidence they may increase firm exits, especially among smaller, low-profit firms, which could reduce access and harm consumer well-being. This study is the first to examine these trade-offs in the childcare industry, a labor-intensive, highly regulated sector where capital-labor substitution is limited, and to provide evidence on how minimum wage policies affect a dual-sector labor market in the U.S., where self-employed and waged providers serve overlapping markets. Using variation from state-level minimum wage increases between 1995 and 2019 and unique microdata, I implement a cross-state county border discontinuity design to estimate impacts on the stocks, flows, and composition of childcare establishments. I find that while county-level aggregate establishment stocks and employment remained stable, establishment-level turnover increased, and employment decreased. I reconcile these findings by showing that minimum wage increases prompted reallocation, with larger establishments in the waged-sector more likely to enter and less likely to exit, making this one of the first studies to link null aggregate effects to shifts in establishment composition. Finally, I show that minimum wage increases may negatively affect the self-employed sector, resulting in fewer owners with advanced degrees and more with only high school education. These findings suggest that minimum wage policies reshape who provides care in ways that could affect both quality and access." (Author's abstract, IAB-Doku) ((en))

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Wang, Tong (2025): Labour market outcomes of minimum wage changes: A behavioural perspective. In: Labour Economics, Jg. 97. DOI:10.1016/j.labeco.2025.102824

Abstract

"The minimum wage has long been central to labour market policy debates. This paper develops a unified theoretical framework to assess the multifaceted effects of minimum wage hikes on employment, wages, effort, labour productivity, and firms’ profits. The model introduces two key channels: a conventional wage channel, where increased compensation for unskilled workers reduces labour demand, and a novel effort channel, where higher effort and productivity in response to perceived employer generosity mitigate job loss. In equilibrium, firms offer wage premiums above the minimum wage to incentivise effort, with spillovers to higher wages through workers’ fairness considerations. The own-wage employment elasticity for unskilled workers is about −0.026, indicating mild disemployment effects. Moreover, this elasticity shows weak dependence on the business cycle. The framework highlights critical interactions across multiple margins, offering comprehensive insights into the broader impacts of minimum wage policy." (Author's abstract, IAB-Doku, © 2025 Elsevier B.V. All rights are reserved, including those for text and data mining, AI training, and similar technologies.) ((en))

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Wiltshire, Justin, Carl McPherson, Michael Reich & Denis Sosinskiy (2025): Minimum Wage Effects and Monopsony Explanations. In: Journal of labor economics, S. 1-46. DOI:10.1086/735551

Abstract

"We present the first causal analysis of a seven-year run-up of minimum wages to $15. Using a novel stacked county-level synthetic control estimator and data on fast-food restaurants, we find substantial pay growth and no disemployment. Our results hold among lower-wage counties and counties without local minimum wages. Minimum wage increases reduce Separation rates and raise wages faster than prices at McDonald’s stores; both findings imply a monopsonistic labor market with declining rents. In the tight post-pandemic labor market, when laborsupply becomes more elastic, we find positive employment effects. These become larger and statistically significant after addressing pandemic-response confounds." (Author's abstract, IAB-Doku) ((en))

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Zhang, Weilong & Petra E. Todd (2025): Distributional Effects of Local Minimum Wages: A Spatial Job Search Approach. In: Journal of labor economics, Jg. 43, H. S1, S. S221-S267. DOI:10.1086/734391

Abstract

"This paper develops a spatial general equilibrium job search model to study the effects of local and universal minimum wage policies on employment, wages, job postings, vacancies, migration, and welfare. Workers search for jobs locally and in neighboring areas, deciding whether to migrate or commute after receiving remote offers. The model, estimated using ACS and QWI data, reliably forecasts commuting responses to city minimum wage hikes. Simulations show that low-skill (noncollege) workers benefit from local wage increases up to $12.50. The greatest per capita welfare gain for all workers is achieved by a $15.25 universal minimum wage." (Author's abstract, IAB-Doku) ((en))

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Azar, José, Emiliano Huet-Vaughn, Ioana Marinescu, Bledi Taska & Till von Wachter (2024): Minimum Wage Employment Effects and Labor Market Concentration. In: The Review of Economic Studies, Jg. 91, H. 4, S. 1843-1883. DOI:10.1093/restud/rdad091

Abstract

"This paper shows that more highly concentrated labor markets experience more positive employment effects of the minimum wage. In the most concentrated labor 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 labor 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 labor market and are robust to using proxies of labour market concentration available for a broader range of industries, such as the number of establishments and population density. A model of oligopsonistic competition can explain these effects: there is more room to increase wages in high-concentration areas where wages tend to be further below marginal productivity. These findings provide evidence supporting monopsonistic wage setting as an explanation for the near-zero minimum wage employment effect documented in prior work." (Author's abstract, IAB-Doku) ((en))

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Dao, Ngoc (2024): Federal minimum wage expansion to homecare workers: Employment and income effects. In: Labour Economics, Jg. 87. DOI:10.1016/j.labeco.2024.102511

Abstract

"The rapid growth of the home care industry coincides with increases in the proportion of the population over 65 years of age and more likely to need assistance with basic daily activities due to illness or disability. Yet, the growth in home care use has been accompanied by concerns about the quality of the care provided. Higher wages and better legal protection might improve the quality of home health care services. This study examines the 2013 Home Care Rule promulgated by the Department of Labor, which added home care workers to the groups covered under the federal minimum wage with minimum hourly and overtime rates. The results show large effects (7–9 %) on part-time employment increase, small effects on work hour reduction (by 2–4 %), and nonnegative effect on overall employment level following the expansion. Despite the decline in hours worked, there is no negative impact on earnings among homecare workers." (Author's abstract, IAB-Doku, © 2024 Elsevier) ((en))

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Derenoncourt, Ellora & David Weil (2024): Voluntary Minimum Wages. (NBER working paper / National Bureau of Economic Research 32546), Cambridge, Mass, 90 S.

Abstract

"Recent wage growth at the bottom of the earnings distribution in the U.S. has reversed a decades-long trend of widening wage inequality. Numerous state and local minimum wage increases have overtaken an effectively non-binding federal minimum, and robust labor demand in the post-pandemic recovery drove wage growth in the low-wage sector. An increasingly pervasive phenomenon over this same period (2014-2023) is the use of company-wide, voluntary minimum wages (VMWs) by private employers, including some of the largest U.S. retailers. We use anonymized payroll data for thousands of firms collected by a major credit bureau to study the effects of these policies on large retailers' own wages and employment, as well as spillover effects onto other employers in shared labor markets, variously defined. Using stacked event studies centered around multiple VMW events and a continuous treatment variable defined as the gap between local area wages and the company minimum, we find that VMWs result in sizable wage increases and reductions in turnover at the companies that implemented them. Turning to wages at other companies, including those connected to the large retailer by worker flows, we estimate precise, economically negligible spillover effects. Despite the decline in separations from companies with voluntary minimums, overall hiring rates at connected employers do not decline, consistent with substitutability across new hires. Although voluntary minimum wage policies have affected over 3 million jobs among the largest retailers, their impact on the broader labor market is limited." (Author's abstract, IAB-Doku) ((en))

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Dube, Arindrajit & Ben Zipperer (2024): Own-Wage Elasticity: Quantifying the Impact of Minimum Wages on Employment. (NBER working paper / National Bureau of Economic Research 32925), Cambridge, Mass, 61 S.

Abstract

"The own-wage elasticity (OWE) of employment estimated using minimum wage increases provides an economically meaningful measure of the policy on jobs. We discuss how to interpret the magnitude of the OWE, including in terms of welfare and under alternative models of the labor market. We present a comprehensive set of OWE estimates from 88 studies and introduce an regularly updated repository of the estimates---https://economic.github.io/owe---an up-to-date snapshot of the existing literature for scholars and policymakers. We find that most studies to date suggest a fairly modest impact of minimum wages on jobs: the median OWE estimate of 72 studies published in academic journals is -0.13, which suggests that only around 13 percent of the potential earnings gains from minimum wage increases are offset due to associated job losses. Estimates published since 2010 tend to be closer to zero." (Author's abstract, IAB-Doku) ((en))

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Godøy, Anna, Michael Reich, Jesse Wursten & Sylvia Allegretto (2024): Parental Labor Supply. Evidence from Minimum Wage Changes. In: The Journal of Human Resources, Jg. 59, H. 2, S. 416-442. DOI:10.3368/jhr.1119-10540r2

Abstract

"We analyze effects of the minimum wage on the labor supply of parents of young children. Distributional difference-in-differences and event-study models document a sharp rise in employment rates of single mothers with children ages zero to five following minimum wage increases. Effects are concentrated among jobs paying close to the minimum wage. We find corresponding drops in the probability of staying out of the labor force to care for family members. Results are consistent with simple labor supply models in which childcare costs create barriers to employment. Minimum wage increases then enable greater labor force participation and reduce child poverty." (Author's abstract, IAB-Doku, © the Board of Regents of the University of Wisconsin System) ((en))

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Jardim, Ekaterina, Mark C. Long, Robert Plotnick, Jacob Vigdor & Emma Wiles (2024): Local minimum wage laws, boundary discontinuity methods, and policy spillovers. In: Journal of Public Economics, Jg. 234. DOI:10.1016/j.jpubeco.2024.105131

Abstract

"We use geographically precise longitudinal employment data documenting worker job-to-job mobility to study policy spillovers in the context of three local minimum wage increases. Estimated spillover impacts on wages and hours are statistically significant, geographically diffuse, and sufficient to create concern regarding interpretation of results even using not-immediately-adjacent regions as controls. Spillover effects appear less concerning with smaller interventions or those adopted in smaller jurisdictions. The boundary discontinuity method of causal inference may yield misleading results if a policy’s impacts do not stop at the border of the implementing jurisdiction." (Author's abstract, IAB-Doku, © 2024 Elsevier) ((en))

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Kalenkoski, Charlene Marie (2024): The effects of minimum wages on youth employment, unemployment, and income. Minimum wages reduce entry-level jobs, training, and lifetime income. (IZA world of labor 243,2), Bonn, 10 S. DOI:10.15185/izawol.243.v2

Abstract

"Empirische Studien belegen, dass Mindestlöhne die Beschäftigungschancen für junge Geringqualifizierte reduzieren. Zwar profitieren diejenigen, die einen Job finden, von höheren Einstiegslöhnen. Für arbeitslose Jugendliche wird der Arbeitsmarkteinstieg dagegen schwerer, was zu langfristigen Einkommenseinbußen führt. Das Lebenseinkommen sinkt zusätzlich aufgrund mangelnder betrieblicher Qualifizierungsangebote. Auszubildende sollten daher vom Mindestlohn ausgenommen sein. Durch staatliche Unterstützung in Form von Geld- oder Sachleistungen ließe sich ungelernten Jugendlichen effektiver helfen." (Autorenreferat, IAB-Doku)

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Lenhart, Otto & Kalyan Chakraborty (2024): Income assistance programs and population health – The dual impact of minimum wages and the earned income tax credit. In: Economics Letters, Jg. 234. DOI:10.1016/j.econlet.2023.111508

Abstract

"In this study, we provide new evidence on the interaction of state-level minimum wages and Earned Income Tax Credit (EITC) laws on several measures of population health. Using data from the National Vital Statistics Reports between 1999 and 2018, we estimate difference-in-differences models to evaluate the dual impact of minimum wages and the EITC on various causes of mortality, such as suicides, motor accidents and assaults. While several researchers have examined the health effects of both these policies separately, few studies have examined the potential interaction effects of these policies. Specifically, while previous work has provided evidence that both minimum wages and the EITC can reduce suicide rates, our study contributes to the literature by showing that the policies have a positive dual impact on population health. We find that a $1 increase in minimum wages reduces death rates due to suicides and assaults by 3.8 percent and 15.2 percent in states with EITC laws, respectively. In contrast, we show that minimum wages do not impact these outcomes in states without state-level EITC laws." (Author's abstract, IAB-Doku, © 2024 Elsevier) ((en))

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Li, Li & Haoming Liu (2024): The minimum wage and cross-community crime disparities. In: Journal of Population Economics, Jg. 37. DOI:10.1007/s00148-024-01023-w

Abstract

"This study examines the heterogeneous impacts of minimum wages, which could affect low-income workers' earnings and employment opportunities, on crime rates across neighboring communities. Using geo-tagged reported crime incident data from 18 major U.S. cities, we find that minimum wage increases reduce violent crime rates notably more in low-income communities than in high-income ones. On average, a one-dollar real minimum wage increase narrows the disparity in quarterly violent crime rates between low- and high-income communities by 12%. The impact varies considerably across different types of cities. The income effect resulting from raising the minimum wage is the main contributing factor." (Author's abstract, IAB-Doku, © Springer-Verlag) ((en))

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Liu, Qing, Ruosi Lu, Stephen Teng Sun & Meng Zhang (2024): Unintended workplace safety consequences of minimum wages. In: Journal of Public Economics, Jg. 239. DOI:10.1016/j.jpubeco.2024.105247

Abstract

"We investigate the unintended impact of minimum wage increases on workplace safety. Using establishment-level data from the United States and a cohort-based stacked difference-in-differences design, we find that large increases in minimum wages have significant adverse effects on workplace safety. Our findings indicate that, on average, a large minimum wage increase results in a 4.6 percent increase in the total case rate. Event study estimates show that this adverse effect persists in the medium run. Furthermore, we find a more salient effect for firms more likely to be financially constrained or subject to a higher labor market rigidity in firing workers. We provide suggestive evidence that small minimum wage increases might reduce injury rates, highlighting the potential heterogeneity in the impact of minimum wage changes. We do not find evidence that capital-labor substitution could be behind the findings." (Author's abstract, IAB-Doku, © 2024 Elsevier) ((en))

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Marchingiglio, Riccardo & Michael Poyker (2024): The Economics of Gender-Specific Minimum Wage Legislation. In: Journal of labor economics. DOI:10.1086/733493

Abstract

"Using full count U.S. census data, we study the impact of early 20th-century state-industry-specific minimum wage laws that primarily targeted female employees. Our triple-difference estimates suggest a null impact of the minimum wage laws, potentially reflecting disemployment effects and the positive selection bias of the workers remaining in the labor force. When comparing county-industry Trends between counties straddling state borders, female employment is lower by around 3.1% in affected county-industry cells. We further investigate the implications for own-wage elasticity of labor demand as afunction of cross-industry concentration, the channels of substitution between men and women, and heterogeneity by marital status." (Author's abstract, IAB-Doku) ((en))

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Marchingiglio, Riccardo & Mikhail Poyker (2024): The Economics of Gender-Specific Minimum Wage Legislation. (IZA discussion paper / Forschungsinstitut zur Zukunft der Arbeit 17016), Bonn, 79 S.

Abstract

"Using full count U.S. census data, we study the impact of early 20th-century state-industry-specific minimum wage laws that primarily targeted female employees. Our triple-difference estimates suggest a null impact of the minimum wage laws, potentially reflecting disemployment effects and the positive selection bias of the workers remaining in the labor force. When comparing county-industry trends between counties straddling state borders, female employment is lower by around 3.1% in affected county-industry cells. We further investigate the implications for own-wage elasticity of labor demand as a function of cross-industry concentration, the channels of substitution between men and women, and heterogeneity by marital status." (Author's abstract, IAB-Doku) ((en))

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Neumark, David (2024): The effects of minimum wages on (almost) everything? A review of recent evidence on health and related behaviors. In: Labour, Jg. 38, H. 1, S. 1-65. DOI:10.1111/labr.12263

Abstract

"I review and assess the evidence on minimum wage effects on health outcomes and health‐related behaviors. The evidence on physical health points in conflicting directions, leaning toward adverse effects. Research on effects on diet and obesity sometimes points to beneficial effects, whereas other evidence indicates that higher minimum wages increase smoking and drinking and reduce exercise (and possibly hygiene). In contrast, there is evidence that higher minimum wages reduce suicides, partly consistent with the evidence of positive or mixed effects on other measures of mental health/depression. Overall, policy conclusions that minimum wages improve health are unwarranted or at least premature." (Author's abstract, IAB-Doku, Published by arrangement with John Wiley & Sons) ((en))

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Neumark, David & Emma Wohl (2024): Do Higher Tipped Minimum Wages Reduce Race, Ethnic, or Gender Earnings Gaps for Restaurant Workers? (NBER working paper / National Bureau of Economic Research 32964), Cambridge, Mass, 61 S.

Abstract

"One of the arguments increasingly made to support large minimum wage increases is that they decrease wage or earnings gaps for minorities or women (e.g., Derenoncourt and Montialoux, 2021). The argument is often made with particular reference to higher tipped minimum wages for restaurant workers, because of discrimination in tipping that is immune to equal pay policy requirements. Of course, even if higher tipped minimum wages reduce hourly pay differences between groups, increases in tipped minimum wages can reduce employment or hours among restaurant workers (Neumark and Yen, 2023), and these effects could differ by race and gender, so implications for hourly earnings do not necessarily extend to overall earnings. We estimate the impact of variation in tipped minimum wages – or, equivalently, tip credits – on earnings of restaurant workers (which ignores employment variation but incorporates hours variation). We find that tipped minimum wages raise hourly earnings of women, but not of Blacks or Hispanics. But tipped minimum wages generally do not raise weekly earnings for these groups (because of hours declines for women). In contrast, regular minimum wages boost hourly and weekly earnings of all three groups of restaurant workers, with the effects arising from non-tipped workers." (Author's abstract, IAB-Doku) ((en))

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Regmi, Krishna (2024): Minimum Wages and the Uptake of Supplemental Security Income. (IZA discussion paper / Forschungsinstitut zur Zukunft der Arbeit 17074), Bonn, 60 S.

Abstract

"This study investigates whether the minimum wage affects the uptake of Supplemental Security Income (SSI). To disentangle the effect of the minimum wage from underlying macroeconomic conditions, I use a triple-differences-type model that exploits cross-state and temporal differences in the minimum wage and its differential effects on those individuals with and without a high school diploma. The results show that a one percent increase in the minimum wage leads to a 0.33 percent decline in SSI uptake. To substantiate the findings, this study employs an alternative approach, leveraging the discontinuity in minimum wage legislation at state borders by comparing SSI uptake within the contiguous state-border counties. Using this approach yields qualitatively similar findings, corroborating the baseline estimates." (Author's abstract, IAB-Doku) ((en))

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Stansbury, Anna (2024): Incentives to Comply with the Minimum Wage in the US and UK. (SocArXiv papers), 24 S. DOI:10.31235/osf.io/7kxdw

Abstract

"There is substantial evidence of minimum wage noncompliance in the US and the UK. In this paper, I compile new, comprehensive data on the costs minimum wage violators incur when detected. In both countries, the costs violators face upon detection are often little more than the money they saved by underpaying. To have an incentive to comply under existing penalty regimes, typical US firms would thus have to expect a 47%-83% probability of detection by the DOL, or a 25% probability of a successful FLSA suit. In the UK, typical firms would have to expect a 44%-56% probability of detection. Actual probabilities of detection are substantially lower than this for many firms, and would likely remain so even with realistic increases in enforcement capacity. Improved enforcement alone is thus insufficient: expected penalties must also substantially increase to ensure that most firms have an incentive to comply. (Stone Center on Socio-Economic Inequality Working Paper)" (Author's abstract, IAB-Doku) ((en))

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Brandon, Alec, Justin E. Holz, Andrew Simon & Haruka Uchida (2023): Minimum Wages and Racial Discrimination in Hiring: Evidence from a Field Experiment. (Upjohn Institute working paper 389), Kalamazoo, Mich., 90 S. DOI:10.17848/wp23-389

Abstract

"When minimum wages increase, employers may respond to the regulatory burdens by substituting away from disadvantaged workers. We test this hypothesis using a correspondence study with 35,000 applications around ex-ante uncertain minimum wage increases in three U.S. states. Before the increases, applicants with distinctively Black names were 19 percent less likely to receive a callback than equivalent applicants with distinctively white names. Announcements of minimum wage hikes substantially reduce callbacks for all applicants but shrink the racial callback gap by 80 percent. Racial inequality decreases because firms disproportionately reduce callbacks to lower-quality white applicants who benefited from discrimination under lower minimum wages." (Author's abstract, IAB-Doku) ((en))

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Burkhauser, Richard V., Drew McNichols & Joseph J. Sabia (2023): Minimum Wages and Poverty: New Evidence from Dynamic Difference-in-Differences Estimates. (NBER working paper / National Bureau of Economic Research 31182), Cambridge, Mass, 97 S.

Abstract

"Advocates of minimum wage increases have long touted their potential to reduce poverty. This study assesses this claim. Using data spanning nearly four decades from the March Current Population Survey, and a dynamic difference-in-differences approach, we find that a 10 percent increase in the minimum wage is associated with a (statistically insignificant) 0.17 percent increase in the probability of longer-run poverty among all persons. With 95% confidence, we can rule out long-run poverty elasticities with respect to the minimum wage of less than -0.129, which includes central poverty elasticities reported by Dube (2019). Prior evidence suggesting large poverty-reducing effects of the minimum wage are (i) highly sensitive to researcher’s choice of macroeconomic controls, and (ii) driven by specifications that limit counterfactuals to geographically proximate states (“close controls”), which poorly match treatment states’ pre-treatment poverty trends. Moreover, an examination of the post-Great Recession era — which saw frequent, large increases in state minimum wages — failed to uncover poverty-reducing effects of the minimum wage across a wide set of specifications. Finally, we find that less than 10 percent of workers who would be affected by a newly proposed $15 federal minimum wage live in poor families." (Author's abstract, IAB-Doku) ((en))

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Clemens, Jeffrey & Michael R. Strain (2023): Does Wage Theft Vary by Demographic Group? Evidence from Minimum Wage Increases. (IZA discussion paper / Forschungsinstitut zur Zukunft der Arbeit 16550), Bonn, 30 S.

Abstract

"Using Current Population Survey data, we assess whether and to what extent the burden of "wage theft" - wage payments below the statutory minimum wage - falls disproportionately on various demographic groups following minimum wage increases. For most racial and ethnic groups at most ages we find that underpayment rises similarly as a fraction of realized wage gains in the wake of minimum wage increases. We also present evidence that the burden of underpayment falls disproportionately on relatively young African American workers and that underpayment increases more for Hispanic workers among the full working-age population." (Author's abstract, IAB-Doku) ((en))

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Forsythe, Eliza (2023): The Effect of Minimum Wage Policies on the Wage and Occupational Structure of Establishments. In: Journal of labor economics, Jg. 41, H. S1, S. S291-S324. DOI:10.1086/726820

Abstract

"Using establishment-level panel data from the Occupational Employment and Wage Statistics program, I estimate the effect of minimum wage increases implemented by 10 states in 2014 and 2015. I show that minimum wage increases lead to wage spillovers within establishments. I find little evidence that minimum wage increases induce establishments to reorganize their occupational mix. Finally, I find that minimum wage increases propagate up the management hierarchy, leading to increased wages for supervisors. Nonetheless, I find overall wage inequality decreases within establishments after minimum wage increases." (Author's abstract, IAB-Doku) ((en))

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Friedrich, Martin, Elke Jahn, Michael Oberfichtner & Johannes Weiß; Alan Manning & David Card (sonst. bet. Pers.) (2023): Unvollkommener Wettbewerb auf dem Arbeitsmarkt: Ursachen, Ausmaß und Folgen (Podium). In: IAB-Forum H. 24.08.2023 Nürnberg. DOI:10.48720/IAB.FOO.20230824.01

Abstract

"Bei vollkommenem Wettbewerb auf dem Arbeitsmarkt, so die klassische ökonomische Theorie, verliert ein Arbeitgeber, der seine Löhne auch nur minimal senkt, sämtliche Beschäftigten. In der Realität ist dies jedoch nur höchst selten der Fall. Denn auf Arbeitsmärkten herrscht in aller Regel nur unvollkommener Wettbewerb. Arbeitgeber verfügen demnach über eine gewisse Marktmacht und können diese nutzen, um niedrigere Löhne zu zahlen, als sie es bei vollkommenem Wettbewerb tun müssten." (Autorenreferat, IAB-Doku)

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Gerritsen, Aart (2023): To Redistribute or to Predistribute? The Minimum Wage versus Income Taxation When Workers Differ in Both Wages and Working Hours. (CESifo working paper 10734), München, 53 S.

Abstract

"I consider the case for the minimum wage alongside (optimal) income taxes when workers differ in both wages and working hours, such that a given level of income corresponds to multiple wage rates. The minimum wage is directly targeted at the lowest-wage workers, while income taxes are at most targeted at all low-income workers, regardless of their hourly wage rates. This renders the minimum wage unambiguously desirable in a discrete-type model of the labor market. Desirability of the minimum wage is a priori ambiguous in a continuous-type model of the labor market. Compared to the minimum wage, income taxes are less effective in compressing the wage distribution but more effective in redistributing income. Desirability of the minimum wage depends on this trade-off between the “predistributional advantage” of the minimum wage and the “redistributional advantage” of the income tax. I derive a desirability condition for the minimum wage and write it in terms of empirical sufficient statistics. A numerical application to the US suggests a strong case for a higher federal minimum wage – especially if social preferences for the lowest-wage workers are relatively strong and the wage elasticity of labor demand relatively small." (Author's abstract, IAB-Doku) ((en))

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Glasner, Benjamin (2023): The Minimum Wage, Self-Employment, and the Online Gig Economy. In: Journal of labor economics, Jg. 41, H. 1, S. 103-127. DOI:10.1086/719690

Abstract

"This paper estimates the effect of minimum wage increases on work that is not covered by minimum wage laws. I find minimum wage increases in the early 2000s resulted in small reductions in engagement in traditional self-employment. Following the development of the online gig economy in the 2010s, a 10% increase in the minimum wage increased the number of non-employer establishments classified as transportation and warehousing services by approximately 2.7%. The counties most likely to exhibit a positive relationship between the minimum wage and participation in uncovered work are those with low labor market concentration and active Uber marketplaces." (Author's abstract, IAB-Doku) ((en))

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Hamilton, Reg & Matt Nichol (2023): One Hundred Years of Dynamic Minimum Wage Regulation: Lessons from Australia, the United Kingdom and the United States. In: International Labour Review, Jg. 162, H. 3, S. 407-429. DOI:10.1111/ilr.12380

Abstract

"Since the first minimum wage legislation was introduced in Australia, the United Kingdom and the United States in the early 1900s, minimum wage regulation has attracted controversy. Opponents of minimum wage levels rely on market theory, while supporters acknowledge the role of markets in setting the price of labour but justify state intervention based on principles of equity and social good. This article examines how these two ideological positions influenced fixing what is both a crucial cost for business and underpinning of worker and family living standards, and whether effective wage fixing has resulted. Little comparative research exists on the origins, evolution and current systems of minimum wage regulation in the three countries and this article aims to address this gap in the literature." (Author's abstract, IAB-Doku, Published by arrangement with John Wiley & Sons) ((en))

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Hean, Oudom & Nanxin Deng (2023): The effects of minimum wages over the business cycle: the Great Recession. In: International Journal of Manpower, Jg. 44, H. 1, S. 19-36. DOI:10.1108/IJM-07-2021-0402

Abstract

"Purpose: This paper examines disemployment effects of minimum wages during the period 2002–2010. Design/methodology/approach: The authors employ the discontinuity design. Findings: The authors find that minimum wages had a significant negative impact on teen employment before the Great Recession. During the Great Recession, the disemployment effects of minimum wages were insignificant. The finding is consistent with the evolution of firms' market power during the business cycle. Originality/value: The authors attempt to reconcile the debate about the effects of minimum wages on US employment." (Author's abstract, IAB-Doku, © Emerald Group) ((en))

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Huet-Vaughn, Emiliano & Jon Piqueras (2023): The Asymmetric Effect of Wage Floors: A Natural Experiment with a Rising and Falling Minimum Wage. (IZA discussion paper / Forschungsinstitut zur Zukunft der Arbeit 16684), Bonn, 14 S.

Abstract

"Exploiting a unique natural experiment,we Show the asymmetric effects of a large increase and an equivalent subsequent decrease to a binding minimum wage. Wages in a leading low-wage industry increase as the Minimum wage rises, but do not fall when it is lowered. This boost for low-wage workers' earnings is apparently permanent five years after the policy is revoked, providing novel evidence of hysteresis in wage setting from temporary labor policy. In the first year post repeal this is consistent with downward nominal wage rigidity. But, the elevated earnings persist even in high inflation times, contrary to the prediction from existing work that real wage reductions under high inflation should erode the nominal wage gap relative to unaffected firms. Our findings thus challenge the conventional view that inflation "greases the wheels" of the labor market in the face of downward nominal wage rigidity, and, demonstrate the value of even transitory labor market policy in achieving permanent gains for workers (play it while you got it)." (Author's abstract, IAB-Doku) ((en))

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Meer, Jonathan & Hedieh Tajali (2023): Effects of the Minimum Wage on the Nonprofit Sector. (NBER working paper / National Bureau of Economic Research 31281), Cambridge, Mass, 37 S.

Abstract

"The nonprofit sector's ability to absorb increases in labor costs differs from the private sector in a number of ways. We analyze how nonprofits are affected by changes in the minimum wage utilizing data from the Bureau of Labor Statistics and the Internal Revenue Service, linked to state minimum wages. We examine changes in reported employment and volunteering, as well as other financial statements such as revenues and expenses. The results from both datasets show a negative impact on employment for states with large statutory minimum wage increases. We observe some evidence for a reduction in the number of nonprofit establishments, fundraising expenses, and revenues from contributions." (Author's abstract, IAB-Doku) ((en))

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Neumark, David (2023): The Effects of Minimum Wages on (Almost) Everything? A Review of Recent Evidence on Health and Related Behaviors. (NBER working paper / National Bureau of Economic Research 31191), Cambridge, Mass, 57 S.

Abstract

"The effects of minimum wages on employment, wages, earnings, and incomes, have been studied and debated for decades. In recent years, however, researchers have turned to the effects on a multitude of other behaviors and outcomes – largely related to health. I review and assess the large and growing body of evidence on minimum wage effects on a wide variety of health outcomes and health-related behaviors. The evidence on overall physical health is mixed. The findings on diet and obesity either point to beneficial or null effects, but not negative effects, while other evidence indicates that higher minimum wages increase smoking and reduce exercise. The evidence for mental health is ambiguous, with somewhat more studies finding no impact than finding a positive impact (but none finding a negative impact). And the evidence for suicide points clearly to beneficial effects of higher minimum wages. Studies on family structure and children point in different directions, with evidence that mothers spend more time with children, no clear indication of changes in treatment of children, but declines in children's test scores. The evidence generally points to minimum wages increasing risky behavior (drinking and smoking). Evidence on the effects of minimum wages on crime is mixed. The best evidence on employer-provided health insurance is more adverse, although Medicaid expansions under the Affordable Care Act (ACA) may have mitigated this influence, and there is not clear evidence of greater unmet medical needs. Other evidence suggests that higher minimum wages may affect health adversely via different channels." (Author's abstract, IAB-Doku) ((en))

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Oka, Tatsushi & Ken Yamada (2023): Heterogeneous Impact of the Minimum Wage: Implications for Changes in Between- and Within-group Inequality. In: The Journal of Human Resources, Jg. 58, H. 1, S. 335-362. DOI:10.3368/jhr.58.3.0719-10339R1

Abstract

"Most of the workers who earn at or below the minimum wage are either less educated, young, or female in the United States. We examine the extent to which the minimum wage influences the wage differential among workers with different observed characteristics and the wage differential among workers with the same observed characteristics. Our results suggest that changes in the real value of the minimum wage account in part for the patterns of changes in education, experience, and gender wage differentials and for most of the changes in within-group wage differentials for workers with lower levels of experience." (Author's abstract, IAB-Doku, © the Board of Regents of the University of Wisconsin System) ((en))

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Taylor, Garrett C. & James E. West (2023): Minimum Wage Effects Within Census Based Statistical Areas: A Matched Pair Cross-Border Analysis. (NBER working paper / National Bureau of Economic Research 31196), Cambridge, Mass, 14 S.

Abstract

"Using monthly data from major U.S. metropolitan areas that span state borders, we estimate the elasticity of employment with respect to the minimum wage using a difference-in-differences design with continuous treatment in two-digit industries of 71 (Arts, Entertainment and Recreation) and 72 (Accommodation and Food Services). In specifications that control for differences in state sales, personal and corporate income tax rates, we find negative average causal response on the treated (ACRT) in six-digit industries where we expect large numbers of young, entry-level employees, but positive correlations in other industries. Our results illustrate important heterogeneities in minimum wage effects in urban versus rural areas." (Author's abstract, IAB-Doku) ((en))

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Taylor, Garrett C. & James E. West (2023): Minimum wage effects within Census Based Statistical Areas: A matched pair cross-border analysis. In: Economics Letters, Jg. 229. DOI:10.1016/j.econlet.2023.111220

Abstract

"Using monthly data from major U.S. metropolitan areas that span state borders, we estimate the elasticity of employment with respect to the minimum wage using a difference-in-differences design with continuous treatment in two-digit industries of 71 (Arts, Entertainment and Recreation) and 72 (Accommodation and Food Services). In specifications that control for differences in state sales, personal and corporate income tax rates, we find a negative average causal response on the treated (ACRT) in six-digit industries where we expect large numbers of young, entry-level employees but positive correlations in other industries. Our results illustrate important heterogeneities in minimum wage effects in urban versus rural areas." (Author's abstract, IAB-Doku, © 2023 Elsevier) ((en))

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Wursten, Jesse & Michael Reich (2023): Racial inequality in frictional labor markets: Evidence from minimum wages. In: Labour Economics, Jg. 82. DOI:10.1016/j.labeco.2023.102344

Abstract

"We provide the first causal analysis of how state and federal minimum wage policies in the U.S. have affected labor market frictions and racial wage gaps. Using stacked event studies, binned difference-in-differences estimators, within-person analyses and classic panel methods, we find that minimum wages increased wages of black workers between 16 and 64% more than among white workers and reduced the overall black-white wage gap by 10% (and by 56% among workers most affected by the policies). Racial differences in initial wages cannot explain this differential effect. Rather, minimum wages expand job opportunities for black workers more than for white workers. We present a model with labor market frictions in which minimum wages expand the job search radius of workers who do not own automobiles and who live farther from jobs. Our causal results using the ACS show that minimum wages increase commuting via automobile among black workers but not among white workers, supporting our model. Minimum wages also reduce racial gaps in separations and hires, further suggesting the policies especially enhance job opportunities for black workers." (Author's abstract, IAB-Doku, © 2023 Elsevier) ((en))

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Adams, Camilla, Jonathan Meer & CarlyWill Sloan (2022): The minimum wage and search effort. In: Economics Letters, Jg. 212. DOI:10.1016/j.econlet.2022.110288

Abstract

"Labor market search-and-matching models posit supply-side responses to minimum wage increases that may lead to improved matches and lessen or even reverse negative employment effects. Using event study analysis of recent minimum wage increases, we find that these changes do not affect the likelihood of searching, but do lead to transitory spikes in search effort by individuals already looking for work. These results are not driven by changes in the composition of searchers, and are concentrated among the groups most likely to be impacted by the minimum wage and in response to larger minimum wage increases." (Author's abstract, IAB-Doku, © 2022 Elsevier) ((en))

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Agarwal, Sumit, Brent W. Ambrose & Moussa Diop (2022): Minimum wage increases and eviction risk. In: Journal of Urban Economics, Jg. 129. DOI:10.1016/j.jue.2021.103421

Abstract

"We extend the debate on the benefits to increasing the minimum wage by examining the impact on expenses associated with shelter, a previously unexplored area. Our analysis uses a unique data set that tracks household rental payments. Increases in state minimum wages significantly reduce the incidence of renters defaulting on their lease contracts by 1.7 percentage points over three months, relative to similar renters who did not experience an increase in the minimum wage. This represents 10.6% fewer monthly defaults. However, this effect slowly decreases over time as landlords react to wage increases by increasing rents." (Author's abstract, IAB-Doku, © 2022 Elsevier) ((en))

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Berger, David W., Kyle F. Herkenhoff & Simon Mongey (2022): Minimum Wages, Efficiency and Welfare. (NBER working paper 29662), Cambridge, Mass, 84 S. DOI:10.3386/w29662

Abstract

"It has long been argued that a minimum wage could alleviate efficiency losses from monopsony power. In a general equilibrium framework that quantitatively replicates results from recent empirical studies, we find higher minimum wages can improve welfare, but most welfare gains stem from redistribution rather than efficiency. Our model features oligopsonistic labor markets with heterogeneous workers and firms and yields analytical expressions that characterize the mechanisms by which minimum wages can improve efficiency, and how these deteriorate at higher minimum wages. We provide a method to separate welfare gains into two channels: efficiency and redistribution. Under both channels and Utilitarian social welfare weights the optimal minimum wage is $15, but alternative weights can rationalize anything from $0 to $31. Under only the efficiency channel, the optimal minimum wage is narrowly around $8, robust to social welfare weights, and generates small welfare gains that recover only 2 percent of the efficiency losses from monopsony power." (Author's abstract, IAB-Doku) ((en))

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Boffy-Ramirez, Ernest (2022): Push or Pull? Measuring the labor supply response to the minimum wage using an individual-level panel. In: Applied Economics, Jg. 54, H. 35, S. 4043-4059. DOI:10.1080/00036846.2021.2020713

Abstract

"For individuals in low-wage labour markets, an increase in the minimum wage can theoretically pull them into or push them out of the labour force. If increases raise expected wages beyond reservation wages, marginal individuals could enter the labour force and begin searching for employment. If increases lower expected wages, marginal individuals already in the labour force could exit. Leveraging revised individual identifiers in the U.S. Current Population Survey, this research estimates the contemporaneous effects of minimum wage increases on labour force participation. The use of within-person variation, short individual panels, and flexible controls for time create an empirical strategy that mitigates potential biases from unobserved constant individual-level heterogeneity and time-varying factors. This research finds that minimum wage changes tend to impact the youngest individuals, but there is substantial heterogeneity in responses by age, race/ethnicity, and sex. There is stronger evidence of pull effects amongst young white men and Latinos, and weaker evidence amongst young Black women and older Latinas. Weak evidence of push effects is observed amongst younger white women, younger Latinos, and older Latinas. This research highlights heterogeneous labour force participation responses to further inform our understanding of search behaviour and labour market churn." (Author's abstract, IAB-Doku) ((en))

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Cengiz, Doruk, Arindrajit Dube, Attila S. Lindner & David Zentler-Munro (2022): Seeing Beyond the Trees: Using Machine Learning to Estimate the Impact of Minimum Wages on Labor Market Outcomes. In: Journal of labor economics, Jg. 40, H. S1, S. S203-S247. DOI:10.1086/718497

Abstract

"We assess the effect of the minimum wage on labor market outcomes. First, we apply modern machine learning tools to predict who is affected by the policy. Second, we implement an event study using 172 prominent minimum wage increases between 1979 and 2019. We find a clear increase in wages of affected workers and no change in employment. Furthermore, minimum wage increases have no effect on the unemployment rate, labor force participation, or labor market transitions. Overall, these findings provide little evidence of changing search effort in response to a minimum wage increase." (Author's abstract, IAB-Doku) ((en))

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Clemens, Jeffrey & Michael R. Strain (2022): Does measurement error explain the increase in subminimum wage payment following minimum wage increases? In: Economics Letters, Jg. 217. DOI:10.1016/j.econlet.2022.110638

Abstract

"In analyses of minimum wages, positive “ripple effects” and subminimum wages are difficult to distinguish from measurement error. Indeed, prior work posits that a simple, symmetric measurement error process may underlie both phenomena in Current Population Survey data for the full working age population. We show that the population-wide symmetry between spillovers and subminimum wage payment is illusory in that spillovers accrue to older individuals while subminimum wage payment accrues to the young. Symmetric measurement error cannot explain this heterogeneity, which increases the likelihood that both spillovers and subminimum-wage payment are real effects of minimum wage increases rather than artifacts of measurement error." (Author's abstract, IAB-Doku, © 2022 Elsevier) ((en))

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Clemens, Jeffrey & Michael R. Strain (2022): Understanding "wage theft": Evasion and avoidance responses to minimum wage increases. In: Labour Economics, Jg. 79. DOI:10.1016/j.labeco.2022.102285

Abstract

"This paper presents strong evidence that minimum wage increases lead to a greater prevalence of subminimum wage payment. Using the Current Population Survey, we estimate that increases in measured underpayment following minimum wage increases average between 12 and 17 percent of realized wage gains. Our baseline analyses focus on workers ages 16 to 25, while additional analyses consider workers ages 16 to 65. In addition, we find that firms and workers comply to a far greater degree with minimum wage increases that are forecastable, modest, and regular than with minimum wage increases enacted through new legislation. We also find evidence that states' enforcement regimes influence the compliance patterns we observe. We interpret these findings as evidence that while minimum wage compliance is the norm, noncompliance is an important, economically nuanced reality in the low-wage labor market." (Author's abstract, IAB-Doku, © 2022 Elsevier) ((en))

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Clemens, Jeffrey & Michael R. Strain (2022): How Important are Minimum Wage Increases in Increasing the Wages of Minimum Wage Workers? (NBER working paper 29824), Cambridge, Mass, 39 S. DOI:10.3386/w29824

Abstract

"Popular discussion commonly presumes an outsized role for minimum wage increases as a driver of wage increases for minimum wage workers. In this paper, we investigate the accuracy of this presumption using data from the earnings studies of the Current Population Survey (CPS). CPS wage and earnings data enable us to assess the fraction of minimum wage workers who receive a raise within 12 months of their initial appearance as a minimum wage worker. On average from 2010 to 2019, we find that roughly 75 percent of minimum wage workers who remain employed experience a wage increase within 12 months. This fraction is higher during the later years of the sample, when the labor market has been strong, than in the earlier years. The fraction of minimum wage workers receiving wage increases is moderately higher when states enact minimum wage increases than when they do not. We also find that the fraction of minimum wage workers receiving wage increases is correlated with several measures of labor market tightness. Finally, wage gains are quite commonly associated with industry and/or occupation switches. This highlights the importance of career progression for the growth of earnings among entry-level workers. The vast majority of the wage gains realized by minimum wage workers thus appear to be driven by career progression and increases in labor demand. Minimum wage increases play a modest role as a driver of earnings trajectories beyond shaping the initial, typically short-lived, minimum wage job itself." (Author's abstract, IAB-Doku) ((en))

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Clemens, Jeffrey & Michael R. Strain (2022): The Minimum Wage and Union Membership among Minimum Wage Workers: Why Do Unions Advocate for Minimum Wage Increases? (IZA discussion paper / Forschungsinstitut zur Zukunft der Arbeit 15685), Bonn, 10 S.

Abstract

"Over the past decade, organized labor has played a significant role in advocating for minimum wage increases. In this paper, we investigate the effects of minimum wage increases on union membership among individuals in minimum wage intensive industries. Consistent with a "freeriding" hypothesis, we find that minimum wage increases predict declines in union membership among low-skilled's most direct beneficiaries. We find no evidence of a change in union membership among high-skilled workers in these industries." (Author's abstract, IAB-Doku) ((en))

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Hurst, Erik, Patrick J. Kehoe, Elena Pastorino & Thomas Winberry (2022): The Distributional Impact of the Minimum Wage in the Short and Long Run. (NBER working paper 30294), Cambridge, Mass, 66 S. DOI:10.3386/w30294

Abstract

"We develop a framework with rich worker heterogeneity, firm monopsony power, and putty-clay technology to study the distributional impact of the minimum wage in the short and long run. Our production technology is disciplined to be consistent with the small estimated employment effects of the minimum wage in the short run and the large estimated elasticities of substitution across inputs in the long run. We find that in the short run, a large increase in the minimum wage has a small effect on employment and therefore increases the labor income of the workers who were earning less than the new minimum wage. In the long run, however, the minimum wage has perverse distributional implications in that it reduces the employment, income, and welfare of precisely the low-income workers it is meant to help. Nonetheless, these long-run effects take time to fully materialize because firms slowly adjust their mix of inputs. Existing transfer programs, such as the earned income tax credit (EITC), are more effective at improving long-run outcomes for workers at the low end of the wage distribution. But combining existing programs with a modest increase in the minimum wage generates even larger welfare gains for low-earning workers." (Author's abstract, IAB-Doku) ((en))

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Jha, Priyaranjan, David Neumark & Antonio Rodriguez-Lopez (2022): What's across the Border? Re-Evaluating the Cross-Border Evidence on Minimum Wage Effects. (IZA discussion paper 15282), Bonn, 31 S.

Abstract

"Dube, Lester, and Reich (2010) argue that state-level minimum wage variation can be correlated with economic shocks, generating spurious evidence that higher minimum wages reduce employment. Using minimum wage variation within contiguous county pairs that share a state border, they find no relationship between minimum wages and employment in the U.S. restaurant industry. We show that this finding hinges critically on using cross-border counties to define local economic areas with which to control for economic shocks that are potentially correlated with minimum wage changes. We use, instead, multi-state commuting zones, which provide superior definitions of local economic areas. Using the same within-local area research design—but within cross-border commuting zones—we find a robust negative relationship between minimum wages and employment." (Author's abstract, IAB-Doku) ((en))

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Johnson, Matthew S. & Michael Lipsitz (2022): Why are Low-Wage Workers Signing Noncompete Agreements? In: The Journal of Human Resources, Jg. 57, H. 3, S. 689-724. DOI:10.3368/jhr.57.3.0619-10274R2

Abstract

"Policymakers are concerned by evidence that noncompete agreements (NCAs) are widely used in low-wage jobs. We show that firms that would otherwise not use NCAs are induced to use one in the presence of frictions to adjusting wages downward. Using a new survey of salon owners, we find that declines in the terms of trade for employees and increases in the minimum wage lead to higher NCA use, but only at firms for which the employee's cost of an NCA likely exceeds the employer's benefit. Furthermore, minimum wage increases have a negative effect on employment only where NCAs are unenforceable." (Author's abstract, IAB-Doku, © the Board of Regents of the University of Wisconsin System) ((en))

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Ku, Hyejin (2022): Does Minimum Wage Increase Labor Productivity? Evidence from Piece Rate Workers. In: Journal of labor economics, Jg. 40, H. 2, S. 325-359. DOI:10.1086/716347

Abstract

"We examine worker effort as a potential margin of adjustment to a minimum wage hike using unique data on piece rate workers who perform a homogenous task and whose individual output is rigorously recorded. By employing a difference-in-differences strategy that exploits the increase in Florida’s minimum wage from USD 6.79 to USD 7.21 on January 1, 2009, and worker location on the pre-2009 productivity distribution, we provide evidence consistent with incumbent workers’ positive effort responses." (Author's abstract, IAB-Doku) ((en))

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Kudlyak, Marianna, Murat Tasci & Didem Tüzemen (2022): Minimum Wage Increases and Vacancies. (IZA discussion paper 15254), Bonn, 37 S.

Abstract

"Using a unique data set and a novel identification strategy, we estimate the effect of minimum wage increases on job vacancy postings. Utilizing occupation-specific county- level vacancy data from the Conference Board's Help Wanted Online for 2005-2018, we find that state-level minimum wage increases lead to substantial declines in existing and new vacancy postings in occupations with a larger share of workers who earn close to the prevailing minimum wage. We estimate that a 10 percent increase in the state-level effective minimum wage reduces vacancies by 2.4 percent in the same quarter, and the cumulative effect is as large as 4.5 percent a year later. The negative effect on vacancies is more pronounced for occupations where workers typically have lower educational attainment (high school or less) and in counties with higher poverty rates. We argue that our focus on vacancies versus on employment has a distinct advantage of highlighting a mechanism through which minimum wage hikes affect labor demand. Our finding of a negative effect on vacancies is not inconsistent with the wide range of findings in the literature about the effect of minimum wage changes on employment, which is driven by changes in both hiring and separation margins." (Author's abstract, IAB-Doku) ((en))

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Liu, Andrew Yizhou (2022): The Minimum Wage And Occupational Mobility. In: International Economic Review, Jg. 63, H. 2, S. 917-945. DOI:10.1111/iere.12552

Abstract

"This article quantifies the effect of minimum wages on workers' occupational mobility. I show that minimum wages decrease younger, less-educated workers' occupational mobility and are associated with more mismatch. A search-and-matching model highlights two channels by which the minimum wage decreases occupational mobility. First, it compresses wages and reduces the gain from switching, leading to lower occupational mobility and more mismatch. Second, it decreases vacancy posting. Calibrating the model to the U.S. economy, the results suggest that a 15 dollar minimum wage can damp aggregate output by 0.4%, of which the wage compression channel accounts for 80%." (Author's abstract, IAB-Doku, Published by arrangement with John Wiley & Sons) ((en))

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Manning, Alan (2022): Der flüchtige Beschäftigungseffekt des Mindestlohns. In: A. Heise & T. Pusch (Hrsg.) (2022): Mindestlöhne – Szenen einer Wissenschaft, S. 137-174.

Abstract

"Mit der Vielzahl von Papieren, die versuchen, den Effekt von Mindestlöhnen auf die Beschäftigung zu schätzen, steigt die Gefahr, den Blick auf die Frage nach dem 'Warum' zu verlieren. Insbesondere auf die Frage, warum es so schwer ist, negative Beschäftigungseffekte von Mindestlöhnen auszumachen. Vielleicht gibt es gewisse ökonomische Faktoren, die den kleinen und oftmals ambivalenten Effekt des Mindestlohns auf die Beschäftigung erklären? Oder vielleicht sind Arbeitsmärkte fundamental von anderen Märkten verschieden? Diese Anliegen sollen in diesem Beitrag diskutiert werden. Die Schlussfolgerung ist, dass der Beschäftigungseffekt des Mindestlohns schwer fassbar ist, aber auch, dass die Ökonomen hiervon nicht überrascht sein sollten, wenn man bedenkt, wie Arbeitsmärkte funktionieren, in denen Abweichungen vom vollständigen Wettbewerb viel größer sind als in vielen anderen Märkten. Tatsächlich mag es an der Zeit sein, dass die Forschung einen Schritt vorwärts macht und sich die Frage stellt, wie weit der Mindestlohn erhöht werden kann, ohne signifikante Beschäftigungseffekte auszulösen." (Textauszug, IAB-Doku)

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McHenry, Peter & Jennifer M. Mellor (2022): The Impact of Recent State and Local Minimum Wage Increases on Nursing Facility Employment. In: Journal of labor research, Jg. 43, H. 3/4, S. 345-368. DOI:10.1007/s12122-022-09338-x

Abstract

"Various U.S. states and municipalities raised their mandated minimum wages between 2017 and 2019. In some areas, minimum wages became high enough to bind for more professional workers, such as lower paid staff at nursing facilities. We add to the small prior literature on the effects of minimum wages on nursing facility staffing using novel establishment-level data on daily hours worked; these data allow us to examine changes in staffing hours along margins previously unexplored in the minimum wage literature. We find no evidence that minimum wage increases reduced hours worked among lower-paid nurses in nursing facilities. In contrast, we find that increases in state and local minimum wages increased hours worked per resident day by nursing assistants; increases occurred for the average of all days throughout the month and on weekend days. We also find that a higher minimum wage increased the share of days in the month that facilities meet at least 75% of the minimum recommended levels of staffing for nursing assistants. These results lessen concerns that minimum wage hikes may reduce the quality of resident care at nursing facilities." (Author's abstract, IAB-Doku, © Springer-Verlag) ((en))

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Neumark, David & Peter Shirley (2022): Myth or measurement: What does the new minimum wage research say about minimum wages and job loss in the United States? In: Industrial Relations, Jg. 61, H. 4, S. 384-417. DOI:10.1111/irel.12306

Abstract

"The disagreement among studies on the employment effects of minimum wages in the United States is well known. Less well known, and more puzzling, is the absence of agreement on what the research literature says—that is, how economists summarize the body of evidence on the employment effects of minimum wages. Summaries range from “it is now well established that higher minimum wages do not reduce employment,” to “the evidence is very mixed with effects centered on zero so there is no basis for a strong conclusion one way or the other,” to “most evidence points to adverse employment effects.” We explore the question of what conclusions can be drawn from the literature, focusing on the evidence using subnational minimum wage variation within the United States that has dominated the research landscape since the early 1990s. To accomplish this, we assembled the entire set of published studies in this literature and identified the core estimates that support the conclusions from each study, in most cases relying on responses from the researchers who wrote these papers. Our key conclusions are as follows: (i) there is a clear preponderance of negative estimates in the literature; (ii) this evidence is stronger for teens and young adults and the less educated; (iii) the evidence from studies of directly affected workers points even more strongly to negative employment effects; and (iv) the evidence from studies of low-wage industries is less one-sided." (Author's abstract, IAB-Doku, Published by arrangement with John Wiley & Sons) ((en))

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Neumark, David & Maysen Yen (2022): Effects of Recent Minimum Wage Policies in California and Nationwide. Results from a Pre-specified Analysis Plan. In: Industrial Relations, Jg. 61, H. 2, S. 228-255. DOI:10.1111/irel.12297

Abstract

"We analyze the impacts of recent city minimum wage increases in California and nationwide, following a pre-analysis plan (PAP) registered prior to the release of data covering two years of minimum wage increases. For California cities, we find a hint of negative employment effects. Nationally, we find some evidence of disemployment effects for teens, but not young adults or high school dropouts. City-specific analyses provide limited evidence of adverse effects on the share low-income, but the pooled city analysis does not; the national analysis generally finds no impact on the share low-income, except for reductions in the share near-poor, although that may at least partly reflect prior trends. All told, we view the results as providing neither strong evidence of substantial adverse effects of city minimum wages, nor strong evidence of substantial beneficial effects." (Author's abstract, IAB-Doku, Published by arrangement with John Wiley & Sons) ((en))

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Renkin, Tobias, Claire Montialoux & Michael Siegenthaler (2022): The Pass-Through of Minimum Wages into U.S. Retail Prices: Evidence from Supermarket Scanner Data. In: The Review of Economics and Statistics, Jg. 104, H. 5, S. 890-908. DOI:10.1162/rest_a_00981

Abstract

"This paper estimates the pass-through of minimum wage increases into the prices of U.S. grocery and drug stores. We use high-frequency scanner data and leverage a large number of state-level increases in minimum wages between 2001 and 2012. We find that a 10% minimum wage hike translates into a 0.36% increase in the prices of grocery products. This magnitude is consistent with a full pass-through of cost increases into consumer prices. We show that price adjustments occur mostly in the three months following the passage of minimum wage legislation rather than after implementation, suggesting that pricing of groceries is forward-looking." (Author's abstract, IAB-Doku, © MIT Press Journals) ((en))

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Todd, Petra E. & Weilong Zhang (2022): Distributional Effects of Local Minimum Wages: A Spatial Job Search Approach. (NBER working paper 30668), Cambridge, Mass, 64 S.

Abstract

"This paper develops and estimates a spatial general equilibrium job search model to study the effects of local and universal (federal) minimum wage policies on employment, wages, job postings, vacancies, migration/commuting, and welfare. In the model, workers, who differ in terms of location and education levels, search for jobs locally and in a neighboring area. If they receive remote offers, they decide whether to migrate or commute. Firms post vacancies in multiple locations and make offers subject to minimum wage constraints. The model is estimated using multiple databases, including the American Community Survey (ACS) and Quarterly Workforce Indicators (QWI), and exploiting minimum wage variation across state borders as well as time series variation (2005-2015). Results show that local minimum wage increases lead firms to post fewer wage offers in both local and neighboring areas and lead lower education workers to reduce interstate commuting. An out-of-sample validation finds that model forecasts of commuting responses to city minimum wage hikes are similar to patterns in the data. A welfare analysis shows how minimum wage effects vary by worker type and with the minimum wage level. Low skill workers benefit from local wage increases up to $10.75/hour and high skill workers up to $12.25/hour. The greatest per capital welfare gain (including both workers and firms) is achieved by a universal minimum wage increase of $12.75/hour." (Author's abstract, IAB-Doku) ((en))

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Winters, John V. (2022): Minimum Wages and Restaurant Employment for Teens and Adults in Metropolitan and Non-metropolitan Areas. (IZA discussion paper 15499), Bonn, 38 S.

Abstract

"This study estimates effects of minimum wages on individual restaurant employment using the 2005-2019 Current Population Survey (CPS) and a two-way fixed effects regression model. I examine effects for teens and adults with less than an associate's degree for the entire U.S. and by metropolitan area status. The results indicate that minimum wages on average decrease restaurant employment for teens and increase restaurant employment for these adults, suggesting that minimum wages induce labor-labor substitution. However, this pattern is driven by metropolitan areas residents. The estimated coefficient for minimum wages on teen restaurant employment in non-metropolitan areas is not statistically significant." (Author's abstract, IAB-Doku) ((en))

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Ashenfelter, Orley & Štepán Jurajda (2021): Wages, Minimum Wages, and Price Pass-Through: The Case of McDonald's Restaurants. (CERGE-EI working paper 684), Prag, 30 S.

Abstract

"We use highly consistent national-coverage price and wage data to provide evidence on wage increases, labor-saving technology introduction, and price pass-through by a large low-wage employer facing minimum wage hikes. Based on 2016-2020 hourly wage rates of McDonald's Basic Crew and prices of the Big Mac sandwich collected simultaneously from almost all US McDonald's restaurants, we find that in about 25% of instances of minimum wage increases, restaurants display a tendency to keep constant their wage 'premium' above the increasing minimum wage. Higher minimum wages are not associated with faster adoption of touch-screen ordering, and there is near-full price pass-through of minimum wages, with little heterogeneity related to how binding minimum wage increases are for restaurants. Minimum wage hikes lead to increases in real wages (expressed in Big Macs an hour of Basic Crew work can buy) that are one fifth lower than the corresponding increases in nominal wages." (Author's abstract, IAB-Doku) ((en))

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Bailey, Martha J., John DiNardo & Bryan A. Stuart (2021): The Economic Impact of a High National Minimum Wage: Evidence from the 1966 Fair Labor Standards Act. In: Journal of labor economics, Jg. 39, H. S2, S. S329-S367. DOI:10.1086/712554

Abstract

"This paper examines the short- and longer-term economic effects of the 1966 Fair Labor Standards Act (FLSA), which increased the national minimum wage to its highest level of the twentieth century and extended coverage to an additional 9.1 million workers. Exploiting differences in the “bite” of the minimum wage owing to regional variation in the standard of living and industry composition, this paper finds that the 1966 FLSA increased wages dramatically but reduced aggregate employment only modestly. However, some evidence shows that disemployment effects were significantly larger among African American men, 40% of whom earned below the new minimum wage." (Author's abstract, IAB-Doku) ((en))

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Cengiz, Doruk, Arindrajit Dube, Attila S. Lindner & David Zentler-Munro (2021): Seeing Beyond the Trees: Using Machine Learning to Estimate the Impact of Minimum Wages on Labor Market Outcomes. (NBER working paper 28399), Cambridge, MA, 60 S. DOI:10.3386/w28399

Abstract

"We assess the effect of the minimum wage on labor market outcomes such as employment, unemployment, and labor force participation for most workers affected by the policy. We apply modern machine learning tools to construct demographically-based treatment groups capturing around 75% of all minimum wage workers—a major improvement over the literature which has focused on fairly narrow subgroups where the policy has a large bite (e.g., teens). By exploiting 172 prominent minimum wages between 1979 and 2019 we find that there is a very clear increase in average wages of workers in these groups following a minimum wage increase, while there is little evidence of employment loss. Furthermore, we find no indication that minimum wage has a negative effect on the unemployment rate, on the labor force participation, or on the labor market transitions. Furthermore, we detect no employment or participation responses even for sub-groups that are likely to have a high extensive margin labor supply elasticity—such as teens, older workers, or single mothers. Overall, these findings provide little evidence for changing search effort in response to a minimum wage increase." (Author's abstract, IAB-Doku) ((en))

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Clemens, Jeffrey & Michael R. Strain (2021): The Heterogeneous Effects of Large and Small Minimum Wage Changes. Evidence over the Short and Medium Run Using a Pre-Analysis Plan. (NBER working paper 29264), Cambridge, Mass, 96 S. DOI:10.3386/w29264

Abstract

"This paper advances the use of pre-analysis plans in non-experimental research settings. In a study of recent minimum wage changes, we demonstrate how analyses of medium- and long-run impacts of policy interventions can be pre-specified as extensions to short-run analyses. Further, our pre-analysis plan includes comparisons of the effects of large vs. small minimum wage increases, which is a theoretically motivated dimension of heterogeneity. We discuss how these use cases harness the strengths of pre-analysis plans while mitigating their weaknesses. This project's initial analyses explored CPS and ACS data from 2011 through 2015. Alongside these analyses, we pre-committed to analyses incorporating CPS and ACS data extending through 2019. Averaging across the specifications in our pre-analysis plan, we estimate that relatively large minimum wage increases reduced employment rates among low-skilled individuals by just over 2.5 percentage points. Our estimates of the effects of relatively small minimum wage increases vary across data sets and specifications but are, on average, both economically and statistically indistinguishable from zero. We estimate that medium-run effects exceed short-run effects and that the elasticity of employment with respect to the minimum wage is substantially more negative for large minimum wage increases than for small increases." (Author's abstract, IAB-Doku) ((en))

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Derenoncourt, Ellora & Claire Montialoux (2021): Minimum Wages and Racial Inequality. In: The Quarterly Journal of Economics, Jg. 136, H. 1, S. 169-228. DOI:10.1093/qje/qjaa031

Abstract

"The earnings difference between white and black workers fell dramatically in the United States in the late 1960s and early 1970s. This article shows that the expansion of the minimum wage played a critical role in this decline. The 1966 Fair Labor Standards Act extended federal minimum wage coverage to agriculture, restaurants, nursing homes, and other services that were previously uncovered and where nearly a third of black workers were employed. We digitize over 1,000 hourly wage distributions from Bureau of Labor Statistics industry wage reports and use CPS microdata to investigate the effects of this reform on wages, employment, and racial inequality. Using a cross-industry difference-in-differences design, we show that earnings rose sharply for workers in the newly covered industries. The impact was nearly twice as large for black workers as for white workers. Within treated industries, the racial gap adjusted for observables fell from 25 log points prereform to 0 afterward. We can rule out significant disemployment effects for black workers. Using a bunching design, we find no aggregate effect of the reform on employment. The 1967 extension of the minimum wage can explain more than 20% of the reduction in the racial earnings and income gap during the civil rights era. Our findings shed new light on the dynamics of labor market inequality in the United States and suggest that minimum wage policy can play a critical role in reducing racial economic disparities." (Author's abstract, IAB-Doku) ((en))

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Dube, Arindrajit & Attila S. Lindner (2021): City Limits: What do Local-Area Minimum Wages Do? In: The Journal of Economic Perspectives, Jg. 35, H. 1, S. 27-50. DOI:10.1257/jep.35.1.27

Abstract

"Cities are increasingly setting their own minimum wages, and this trend has accelerated sharply in recent years. While in 2010 there were only three cities with their own minimum wages exceeding the state or federal standard, by 2020 there were 42. This new phenomenon raises the question: is it desirable to have city-level variation in minimum wage polices? We discuss the main trade-offs emerging from local variation in minimum wage polices and evaluate their empirical relevance. First, we document what type of cities raise minimum wages, and we discuss how these characteristics can potentially impact the effectiveness of city-level minimum wage policies. Second, we summarize the evolving evidence on city-level minimum wage changes and provide some new evidence of our own. Early evidence suggests that the impact of the policy on wages and employment to date has been broadly similar to the evidence on state- and federal-level minimum wage changes. Overall, city-level minimum wages seem to be able to tailor the policy to the local economic environment without imposing substantial distortions in allocation of labor and businesses across locations." (Author's abstract, IAB-Doku) ((en))

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Engelhardt, Gary V. & Patrick J. Purcell (2021): The minimum wage and annual earnings inequality. In: Economics Letters, Jg. 207. DOI:10.1016/j.econlet.2021.110001

Abstract

"We estimate the impact of the minimum wage on U.S. male annual earnings inequality, using administrative Social Security earnings records from 1981-2015. The minimum wage reduces inequality in the bottom quartile of the earnings distribution, and especially in the bottom decile." (Author's abstract, IAB-Doku, © 2021 Elsevier) ((en))

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Fishback, Price V. & Andrew Seltzer (2021): The Rise of American Minimum Wages, 1912-1968. In: The Journal of Economic Perspectives, Jg. 35, H. 1, S. 73-96. DOI:10.1257/jep.35.1.73

Abstract

"This paper studies the judicial, political, and intellectual battles over minimum wages from the early state laws of the 1910s through the peak in the real federal minimum in 1968. Early laws were limited to women and children and were ruled unconstitutional by the Supreme Court between 1923 and 1937. The first federal law in 1938 initially exempted large portions of the workforce and set rates that became effectively obsolete during World War II. Later amendments raised minimum rates, but coverage did not expand until 1961. The states led the way in rates and coverage in the 1940s and 50s and again since the 1980s. The most contentious questions of today—the impact of minimum wages on earnings and employment—were already being addressed by economists in the 1910s. By about 1960, these discussions had surprisingly modern concerns about causality but did not have modern econometric tools or data." (Author's abstract, IAB-Doku) ((en))

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Godoey, Anna & Michael Reich (2021): Are Minimum Wage Effects Greater in Low-Wage Areas? In: Industrial Relations, Jg. 60, H. 1, S. 36-83. DOI:10.1111/irel.12267

Abstract

"Empirical work on the minimum wage typically estimates effects averaged across high- and low-wage areas. Low-wage labor markets could potentially be less able to absorb minimum wage increases, in turn leading to more negative employment effects. In this article, we examine minimum wage effects in low-wage counties, where relative minimum wage ratios reach as high as 0.82, well beyond the state-based ratios in extant studies. Using data from the American Community Survey, the Quarterly Workforce Indicators, and the Quarterly Census on Employment and Wages, we implement event study and difference-in-differences methods, estimating average causal effects for all events in our sample and separately for areas with lower and higher impacts. We find positive wage effects, especially in high-impact counties, but do not detect adverse effects on employment, weekly hours, or annual weeks worked. We do not find negative employment effects among women, Blacks, and/or Hispanics. In high-impact counties, we find substantial declines in household and child poverty. These results inform policy debates about providing exemptions to a $15 federal minimum wage in low-wage areas." (Author's abstract, IAB-Doku, Published by arrangement with John Wiley & Sons) ((en))

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Gopalan, Radhakrishnan, Barton Hamilton, Ankit Kalda & David Sovich (2021): State Minimum Wages, Employment, and Wage Spillovers: Evidence from Administrative Payroll Data. In: Journal of labor economics, Jg. 39, H. 3, S. 673-707. DOI:10.1086/711355

Abstract

"We use administrative payroll data to estimate the effect of the minimum wage on employment and wages. We find that both effects are nuanced. While the overall number of low-wage workers in firms declines, incumbent workers are no less likely to remain employed. We find that firms reduce employment primarily through hiring, and there is significant heterogeneity across the non-tradable and tradable sectors. For wages, we find modest spillovers extending up to $2.50 above the minimum wage. Spillovers accrue to both incumbent workers and new hires, but only within firms that employ a significant fraction of low-wage workers." (Author's abstract, IAB-Doku) ((en))

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Jha, Priyaranjan & Antonio Rodriguez-Lopez (2021): Minimum Wage and Firm Variety. (CESifo working paper 9312), München, 19 S.

Abstract

"Exploiting minimum-wage variation within multi-state commuting zones, we document a negative relationship between minimum wages and firm variety in the U.S. restaurant and retail-trade industries. To explain this finding, we construct a heterogeneous-firm model with a monopsonistic labor market and endogenous firm variety. The decentralized equilibrium underprovides the mass of firms compared to the outcome achieved by a welfare-maximizing planner. A binding minimum wage further reduces the mass of firms, exacerbating the distortion. Workers value employer variety, and thus, by reducing firm variety the minimum wage reduces workers’ welfare even if the average wage increases." (Author's abstract, IAB-Doku) ((en))

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Leung, Justin H. (2021): Minimum Wage and Real Wage Inequality: Evidence from Pass-Through to Retail Prices. In: The Review of Economics and Statistics, Jg. 103, H. 4, S. 754-769. DOI:10.1162/rest_a_00915

Abstract

"This paper considers the impact of the minimum wage on both labor and product markets using detailed store-level scanner data. I provide empirical evidence that a 10% increase in the minimum wage raises grocery store prices by 0.6% to 0.8% and suggest that the minimum wage not only raises labor costs but also affects product demand, especially in poorer regions. This points to novel channels of heterogeneity in pass-through that have distributional consequences, with key implications for real wage inequality. I also find that price rigidity within retail chains ameliorates these effects, reducing the pass-through elasticity for retail prices by about 60%." (Author's abstract, IAB-Doku, © MIT Press Journals) ((en))

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Majchrowska, Aleksandra & Pawel Strawinski (2021): Minimum wage and local employment: A spatial panel approach. In: Regional Science Policy & Practice, Jg. 13, H. 5, S. 1581-1602. DOI:10.1111/rsp3.12471

Abstract

"This study analyzes spatial dependencies in the relationship between employment and minimum wage. Local employment may be affected not only by changes relative minimum wage in a region but also by those in neighboring regions. We use the spatial Durbin model and data for 380 local Polish labor markets during 2006–2018. The results reveal significant heterogeneities in the model, showing a significant spatial relationship between local employment and the minimum-to-average-wage ratio in neighboring regions. Local minimum wage effects, insignificant at the beginning of the analyzed period, become significant and negative. These results may not be observed without a spatial model framework and are important for minimum-wage policymakers. Our results suggest that, in countries with strong differences in average wage level between regions, the minimum wage can be differentiated at the local labor market level to avoid large differences in the minimum-to-average-wage ratio." (Author's abstract, IAB-Doku, Published by arrangement with John Wiley & Sons) ((en))

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Manning, Alan (2021): The elusive employment effect of the minimum wage. In: The Journal of Economic Perspectives, Jg. 35, H. 1, S. 3-26. DOI:10.1257/jep.35.1.3

Abstract

"It is hard to find a negative effect on the employment effect of rises in the minimum wage: the elusive employment effect. It is much easier to find an impact on wages. This paper argues the elusive employment effect is unlikely to be solved by better data, methodology, or specification. The reasons for the elusive employment effect are the factors contributing to why the link between higher minimum wages and higher labor costs are weaker than one might think and because imperfect competition is pervasive in the labor market." (Author's abstract, IAB-Doku) ((en))

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Neumark, David & Peter Shirley (2021): Myth or Measurement: What Does the New Minimum Wage Research Say about Minimum Wages and Job Loss in the United States? (NBER working paper 28388), Cambridge, MA, 48 S. DOI:10.3386/w28388

Abstract

"The disagreement among studies of the employment effects of minimum wages in the United States is well known. What is less well known, and more puzzling, is the absence of agreement on what the research literature says – that is, how economists even summarize the body of evidence on the employment effects of minimum wages. Summaries range from “it is now well-established that higher minimum wages do not reduce employment,” to “the evidence is very mixed with effects centered on zero so there is no basis for a strong conclusion one way or the other,” to “most evidence points to adverse employment effects.” We explore the question of what conclusions can be drawn from the literature, focusing on the evidence using subnational minimum wage variation within the United States that has dominated the research landscape since the early 1990s. To accomplish this, we assembled the entire set of published studies in this literature and identified the core estimates that support the conclusions from each study, in most cases relying on responses from the researchers who wrote these papers. Our key conclusions are: (i) there is a clear preponderance of negative estimates in the literature; (ii) this evidence is stronger for teens and young adults as well as the less-educated; (iii) the evidence from studies of directly-affected workers points even more strongly to negative employment effects; and (iv) the evidence from studies of low-wage industries is less one-sided." (Author's abstract, IAB-Doku) ((en))

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Neumark, David & Maysen Yen (2021): Effects of Recent Minimum Wage Policies in California and Nationwide. Results from a Pre-specified Analysis Plan. (NBER working paper 28555), Cambridge, MA, 68 S. DOI:10.3386/w28555

Abstract

"We analyze the impacts of recent city minimum wage increases in California and nationwide, following a pre-analysis plan (PAP) registered prior to the release of data covering two years of minimum wage increases. For California cities we find a hint of negative employment effects. Nationally, we find some evidence of disemployment effects for teens, but not young adults or high school dropouts. City-specific analyses provide limited evidence of adverse effects on the share low-income, but the pooled city analysis does not; the national analysis generally finds no impact on the share low-income, with one exception that may reflect prior trends." (Author's abstract, IAB-Doku) ((en))

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Ross, Jacqueline & John Welsh (2021): Understanding the "Tipped Minimum Wage": Critical Directions for US Policy Research. In: Social Policy and Society, Jg. 20, H. 2, S. 192-210. DOI:10.1017/S1474746420000214

Abstract

"With the 'gig economy' moving to the forefront of research on service labour, interest has heightened in the techniques of labour control that reproduce it. Taking tipping as just such a technique, this article explores critically the policy research around 'tipped' employment in the United States. In the United States, tipping is a legally recognised form of labour remuneration that informalises the wage relation, incentivises the worker in precarity, and internalises social relations of subordination. Understanding tipped work, its legal status, its operative logic, and the contradictions that arise within its framework, is a priority for relevant social policy analysis. The aims here are: 1) to set out the 'topography' of the policy landscape on tipping in the United States; and 2) to problematise the current scope of this policy literature in societal terms. This research will focus on the restaurant industry, but will establish its broader societal significance." (Author's abstract, IAB-Doku) ((en))

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Simon, Andrew & Matthew Wilson (2021): Optimal minimum wage setting in a federal system. In: Journal of Urban Economics, Jg. 123. DOI:10.1016/j.jue.2021.103336

Abstract

"Minimum wages in the United States are jointly set by federal, state, and local governments, while many other countries have a single national policy. This paper studies the relative merits of centralized and decentralized policy setting. A binding policy is optimal if the benefits from redistribution outweigh the costs from migration, which are relatively steeper for local governments. Centralized policy, though uniform in practice, reduces horizontal migration externalities, which improves decentralized minimum wage setting. Our results therefore indicate that decentralized and centralized policy setting exhibit strategic complementarity; the extent of which depends on mobility and regional heterogeneity. We then calibrate a model of the continental US and find that joint policy setting leads to a small welfare gain over centralization, and closely resembles the social planner's optimal policies." (Author's abstract, IAB-Doku, © 2021 Elsevier) ((en))

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Smith, Alexander A. (2021): The minimum wage and teen educational attainment. In: Labour Economics, Jg. 73. DOI:10.1016/j.labeco.2021.102061

Abstract

"Teen employment effects are central to the minimum wage debate, but important indirect effects on education receive relatively little attention. I investigate the effect of changes in the minimum wage on high school dropout decisions. Consistently across two sources of variation and three individual-level datasets, I find that increases in the minimum wage substantially reduce the dropout likelihood of low-socioeconomic status (SES) teens but have no effect on other teens." (Author's abstract, IAB-Doku, © 2022 Elsevier) ((en))

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Bailey, Martha J., John DiNardo & Bryan A. Stuart (2020): The Economic Impact of a High National Minimum Wage: Evidence from the 1966 Fair Labor Standards Act. (NBER working paper 26926), Cambridge, Mass., 46 S. DOI:10.3386/w26926

Abstract

"This paper examines the short and longer-term economic effects of the 1966 Fair Labor Standards Act (FLSA) which increased the national minimum wage to its highest level of the 20th Century and extended coverage to an additional 9.1 million workers. Exploiting differences in the “bite” of the minimum wage due to regional variation in the standard of living and industry composition, this paper finds that the 1966 FLSA increased wages dramatically but reduced aggregate employment only modestly. However, the disemployment effects were significantly larger among African-American men, forty percent of whom earned below the new minimum wage in 1966." (Author's abstract, IAB-Doku) ((en))

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Cho, Heepyung & Mark Borgschulte (2020): Minimum wages and retirement. In: ILR review, Jg. 73, H. 1, S. 153-177. DOI:10.1177/0019793919845861

Abstract

"The authors study the effect of the minimum wage on the employment outcomes and Social Security claiming of older US workers from 1983 to 2016. The probability of work at or near the minimum wage increases substantially near retirement, and previous researchers and policies suggest that older workers may be particularly vulnerable to any disemployment effects of the minimum wage. Results show no evidence that the minimum wage causes earlier retirements. Instead, estimates suggest that higher minimum wages increase earnings and may have small positive effects on the labor supply of workers in the key ages of 62 to 70. Consistent with increased earnings and delayed retirement, higher minimum wages decrease the number of Social Security beneficiaries and amount of benefits disbursed. The minimum wage appears to increase financial resources for workers near retirement." (Author's abstract, IAB-Doku) ((en))

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Clemens, Jeffrey, Lisa B. Kahn & Jonathan Meer (2020): Dropouts Need Not Apply? The Minimum Wage and Skill Upgrading. (NBER working paper 27090), Cambridge, Mass., 66 S. DOI:10.3386/w27090

Abstract

"We explore whether minimum wage increases result in substitution from lower-skilled to slightly higher-skilled labor. Using 2011-2016 American Community Survey data (ACS), we show that workers employed in low-wage occupations are older and more likely to have a high school diploma following recent statutory minimum wage increases. To better understand the role of firms, we examine the Burning Glass vacancy data. We find increases in a high school diploma requirement following minimum wage hikes, consistent with our ACS evidence on stocks of employed workers. We see substantial adjustments to requirements both within and across firms." (Author's abstract, IAB-Doku) ((en))