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Research papers on The minimum wage and jobs

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

    David Neumark, William L. Wascher · 1992 · Industrial and Labor Relations Review · 656 citations

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

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  2. Effects of the Minimum Wage on Employment Dynamics

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

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

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  3. Effects of the Minimum Wage on the Employment Status of Youths: An Update

    ALISON J. WELLINGTON · 1991 · The Journal of Human Resources · 141 citations

    The large decline in the relative value of the minimum wage during the 1980s makes that period a valuable one for identifying the impact of variation in the minimum wage on youth employment. This study produces the robust finding that, when the experience of the 1980s is included, a 10 percent increase in the minimum wage is estimated to reduce teen employment by less than 1 percent-the lower end of the range of previous estimates. Because this small employment effect is offset by a labor force withdrawal effect, the study finds no discernible effect on measured unemployment. The study also finds no apparent effect of the minimum wage on the employment of young adults aged 20-24.

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  4. The Employment Effects of the National Minimum Wage

    Mark B. Stewart · 2004 · The Economic Journal · 135 citations

    This paper estimates the employment effects of the introduction of the UK National Minimum Wage in April 1999 and subsequent upratings in 2000 and 2001. It uses a difference-in-differences estimator based on position in the wage distribution. For the upratings an adjusted estimator is also introduced to allow for the possible differential response to the change in the macro employment trend. No significant adverse employment effects are found for any of these events for any of the estimators for any demographic group.

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  5. Employment Effects of the New German Minimum Wage: Evidence from Establishment-Level Microdata

    Mario Bossler, H. Gerner · 2019 · ILR Review · 134 citations

    The authors present the first evidence on the consequences of the new statutory minimum wage in Germany, which was implemented on January 1, 2015. Using the IAB Establishment Panel, they identify employment effects from variation in the extent that establishments are affected by the minimum wage. A difference-in-differences estimation reveals an increase in average wages between 3.8% and 6.3% and an employment loss by approximately 1.7% in establishments affected by the minimum wage. These estimates imply a labor demand elasticity with respect to wages ranging between −0.2 and −0.4. The authors also observe a transitory reduction of the working hours in the first year after the introduction

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  6. Minimum Wage Employment Effects and Labor Market Concentration

    José Azar, Emiliano Huet-Vaughn, Ioana Marinescu, et al. · 2019 · National Bureau of Economic Research · 124 citations

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

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  7. The short-run employment effects of the German minimum wage reform

    Marco Caliendo, Alexandra Fedorets, Malte Preuss, et al. · 2018 · Labour Economics · 118 citations

    We assess the short-term employment effects of the introduction of a national statutory minimum wage in Germany in 2015. For this purpose, we exploit variation in the regional treatment intensity, assuming that the stronger a minimum wage "bites" into the regional wage distribution, the stronger the regional labour market will be affected. In contrast to previous studies, we draw upon detailed individual wage data from the Structure of Earnings Survey (SES) 2014 and combine it with administrative information on regional employment. Moreover, using the Socio-Economic Panel (SOEP), we are able to affirm the absence of anticipation effects and verify the assumption of a common trend in wages be

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  8. Minimum-Wage Increases and Low-Wage Employment: Evidence from Seattle

    Ekaterina Jardim, M. Long, Robert D. Plotnick, et al. · 2022 · American Economic Journal: Economic Policy · 105 citations

    Seattle raised its minimum wage to as much as $11 in 2015 and as much as $13 in 2016. We use Washington State administrative data to conduct two complementary analyses of its impact. Relative to outlying regions of the state identified by the synthetic control method, aggregate employment at wages less than twice the original minimum—measured by total hours worked—declined. A portion of this reduction reflects jobs transitioning to wages above the threshold; the aggregate analysis likely overstates employment effects. Longitudinal analysis of individual Seattle workers matched to counterparts in outlying regions reveals no change in the probability of continued employment but significant red

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  9. The Effects of the Minimum Wage on the Employment and Earnings of Youth

    Robert H. Meyer, David A. Wise · 1983 · Journal of Labor Economics · 100 citations

    The employment and earnings effects of the minimum wage are estimated by parameterizing a hypothesized relationship between underlying market employment and wage relationships versus observed wage and employment distributions in the presence of a legislated minimum. If there had been no minimum during the 1973-78 period, we estimate that employment among out-of-school men 16-24 would have been approximately 4% higher than it was. Among young men 16-19 employment would have been about 7% higher; among those 20-24, 2% higher. Employment among black youth 16-24 would have been almost 6% higher than it was, compared with somewhat less than 4% for white youth. Although it is sometimes argued that

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  10. Minimum Wage Employment Effects and Labour Market Concentration

    José Azar, Emiliano Huet-Vaughn, Ioana Marinescu, et al. · 2023 · The Review of Economic Studies · 74 citations

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

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  11. Minimum Wage Effects on Employment and School Enrollment

    David Neumark, William L. Wascher · 1995 · Journal of Business and Economic Statistics · 60 citations

    We argue in this article that the focus on employment effects in recent studies of minimum wages ignores an important interaction between schooling, employment, and the minimum wage. To study these linkages, we estimate a conditional logit model of employment and enrollment outcomes for teenagers using state–year observations for the period 1977 to 1989. The results show a negative influence of minimum wages on school enrollment and a positive effect on the proportion of teens neither employed nor in school. We further suggest that our results are consistent with substitution by employers of higher-for lower-skilled teenagers, with the displaced teens ending up both out of work and out of sc

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  12. Employment effects of introducing a minimum wage: The case of Germany

    Oliver Holtemöller, F. Pohle · 2020 · Economic Modelling · 47 citations

    This paper contributes to the empirical literature on the employment effects of minimum wages. We analysed the introduction of a statutory minimum wage in Germany in 2015 exploiting cross-sectional variation of the minimum wage affectedness. We construct two variables that measure the affectedness for approximately 300 state-industry combinations based on aggregate monthly income data. The estimation strategy consists of two steps. We test for (unidentified) structural breaks in a model with cross-section specific trends to control for state-industry specific developments prior to 2015. In a second step, we test whether the trend deviations are correlated with the minimum wage affectedness.

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  13. Effects of the Minimum Wage on Employment Dynamics

    Jonathan Meer, Jeremy West · 2013 · National Bureau of Economic Research · 43 citations

    The voluminous literature on minimum wages offers little consensus on the extent to which a wage floor impacts employment.We argue that the minimum wage will impact employment over time, through changes in growth rather than an immediate drop in relative employment levels.We conduct simulations showing that commonly-used specifications in this literature, especially those that include state-specific time trends, will not accurately capture these effects.Using three separate state panels of administrative employment data, we find that the minimum wage reduces job growth over a period of several years.These effects are most pronounced for younger workers and in industries with a higher proport

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  15. The new German statutory minimum wage in comparative perspective: Employment effects and other adjustment channels

    Oliver Bruttel, Arne Baumann, M. Dütsch · 2018 · European Journal of Industrial Relations · 34 citations

    Germany was one of only seven EU member states without a statutory minimum wage before its new legislation took effect in January 2015. We explore the consequences for wage structure, employment and companies. The new wage floor brought significant increases for low-paid employees, with limited observable negative employment effects thus far. To explain these benign outcomes, we refer to institutionalist and behavioural theories and discuss a number of other adjustment channels for companies. Preliminary evidence suggests that companies in sectors highly affected have responded by reducing working hours and/or increasing work intensity and prices. Some have cut special payments and non-wage

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  19. Employment effects of the minimum wage: evidence from the Spanish 2019 reform

    Lucía Gorjón, David Martinez de Lafuente, Gonzalo Romero · 2023 · SERIEs · 20 citations

    We examine the employment effects of the 2019 minimum wage increase in Spain on individual probabilities of losing employment status (extensive margin) and lowering work intensity (intensive margin). To do so, we use variation of workers’ exposure to the reform by comparing monthly employment transitions into unemployment and reductions in number of working hours between employees earning less than the minimum wage (treatment group) and those earning more and that should therefore be unaffected by the reform (control group). We find that the new minimum wage significantly increased the probability of experiencing unemployment (1.7 percentage points) and a reduction in work intensity (0.9 per

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  21. Using Occupations to Evaluate the Employment Effects of the German Minimum Wage

    M. Friedrich · 2019 · Jahrbücher für Nationalökonomie und Statistik · 15 citations

    Abstract This paper evaluates the short to medium run employment effects of the 2015 introduction of a statutory minimum wage in Germany. The effect of the policy is recovered from variation in the bite of the minimum wage across occupations using a difference-in-differences estimator. The analysis reveals that the reform only had a small impact on employment and highlights the importance of regional effect heterogeneity. In East Germany, marginal employment decreased by about 18,000 jobs in the short run and 52,000 jobs in the medium run, respectively, due to the minimum wage. In West Germany, no negative employment effects are detectable, but regular employment increased temporarily becaus

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  23. Minimum wage standard adjustment and employment: Heterogeneity effects on the human capital investment

    Ling Lin, Hayat Khan, Qian-Qian Liu, et al. · 2024 · Heliyon · 11 citations

    Considerable debate has arisen around the potential effects of increasing the minimum wage on employment. This study aims to analyze the impact of changes in China's minimum wage standard on employment. The research utilises the canonical model method and constructs a regression model based on standard labor economics theory. The analysis is conducted using sample data from Chinese industrial enterprises between 2000 and 2007. Regression analysis is performed by categorizing enterprises based on their level of human capital investment. The findings indicate that minimum wage increases have a non-linear impact on employment, when seen from the standpoint of human capital investment. When the

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