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Employment Effects of the 2009 Minimum Wage Increase: New Evidence from State-Based Comparisons of Workers by Skill Level

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  • Hoffman Saul D.

    (Department of Economics, University of Delaware, 413 Purnell Hall, Newark, DE 19716, USA)

Abstract

In July, 2009, when the US Federal minimum wage was increased from $6.55 to $7.25, individuals in nearly one-third of all states were unaffected, since the state minimum wage already exceeded $7.25. We use this variation to make comparisons of the employment of low-skill workers with their peers across states and with workers within states who were arguably unaffected by the increase, using DID and DIDID methods. Our data come from the 2009 Current Population Survey, 4 and 5 months before and after the increase. We find little evidence of negative employment effects for teens or less-educated adults. Further control for demographic characteristics and state fixed effects have relatively small effects on the size and significance of estimated effects.

Suggested Citation

  • Hoffman Saul D., 2014. "Employment Effects of the 2009 Minimum Wage Increase: New Evidence from State-Based Comparisons of Workers by Skill Level," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 14(3), pages 1-27, July.
    • Handle: RePEc:bpj:bejeap:v:14:y:2014:i:3:p:27:n:1
    DOI: 10.1515/bejeap-2012-0004
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    References listed on IDEAS

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    1. David Card, 1992. "Using Regional Variation in Wages to Measure the Effects of the Federal Minimum Wage," Working Papers 680, Princeton University, Department of Economics, Industrial Relations Section..
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    6. Neumark, David & Salas, J.M. Ian & Wascher, William, 2013. "Revisiting the Minimum Wage-Employment Debate: Throwing Out the Baby with the Bathwater?," IZA Discussion Papers 7166, Institute of Labor Economics (IZA).
    7. David Card, 1992. "Using Regional Variation in Wages to Measure the Effects of the Federal Minimum Wage," ILR Review, Cornell University, ILR School, vol. 46(1), pages 22-37, October.
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    9. Burkhauser, Richard V & Couch, Kenneth A & Wittenburg, David C, 2000. "A Reassessment of the New Economics of the Minimum Wage Literature with Monthly Data from the Current Population Survey," Journal of Labor Economics, University of Chicago Press, vol. 18(4), pages 653-680, October.
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    Cited by:

    1. Clemens, Jeffrey & Strain, Michael R., 2019. "Minimum Wage Analysis Using a Pre-Committed Research Design: Evidence through 2017," IZA Discussion Papers 12388, Institute of Labor Economics (IZA).
    2. Agarwal, Sumit & Ambrose, Brent W. & Diop, Moussa, 2022. "Minimum wage increases and eviction risk," Journal of Urban Economics, Elsevier, vol. 129(C).
    3. Clemens, Jeffrey & Wither, Michael, 2019. "The minimum wage and the Great Recession: Evidence of effects on the employment and income trajectories of low-skilled workers," Journal of Public Economics, Elsevier, vol. 170(C), pages 53-67.
    4. Jeffrey Clemens & Michael R. Strain, 2018. "The Short‐Run Employment Effects Of Recent Minimum Wage Changes: Evidence From The American Community Survey," Contemporary Economic Policy, Western Economic Association International, vol. 36(4), pages 711-722, October.
    5. Clemens, Jeffrey & Strain, Michael R., 2018. "Minimum Wage Analysis Using a Pre-Committed Research Design: Evidence through 2016," IZA Discussion Papers 11427, Institute of Labor Economics (IZA).
    6. David Neumark & Peter Shirley, 2022. "Myth or measurement: What does the new minimum wage research say about minimum wages and job loss in the United States?," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 61(4), pages 384-417, October.
    7. Clemens, Jeffrey & Strain, Michael R., 2020. "Minimum Wage Analysis Using a Pre-Committed Research Design: Evidence through 2018," IZA Discussion Papers 13286, Institute of Labor Economics (IZA).
    8. David Neumark & 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 Papers 28388, National Bureau of Economic Research, Inc.
    9. Kwapisz Agnieszka, 2020. "Minimum Wages and Nascent Entrepreneurship in the US," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 20(1), pages 1-15, January.

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