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Can Rescheduling Explain the New Jersey Minimum Wage Studies?

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  • Thomas R. Michl

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    (Department of Economics, Colgate University)

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    Abstract

    This paper interprets the New Jersey minimum wage studies of Card and Krueger and their critics, Neumark and Wascher through a scheduling model. The former found an increase in the number of workers in New Jersey fast-food restaurants after the state minimum wage was increased, while the latter found a decline in the total payroll hours of New Jersey restaurants. The scheduling model predicts that firms will substitute workers for hours per worker after a wage increase, which is consistent with both studies. Evidence from a subset of restaurants which reported both workers and hours data to Neumark and Wascher supports this interpretation.

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    File URL: http://college.holycross.edu/RePEc/eej/Archive/Volume26/V26N3P265_276.pdf
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    Bibliographic Info

    Article provided by Eastern Economic Association in its journal Eastern Economic Journal.

    Volume (Year): 26 (2000)
    Issue (Month): 3 (Summer)
    Pages: 265-276

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    Handle: RePEc:eej:eeconj:v:26:y:2000:i:3:p:265-276

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    Web page: http://www.ramapo.edu/eea/journal.html
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    Related research

    Keywords: Minimum Wage; Wage;

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    Cited by:
    1. Mark B. Stewart & Joanna K. Swaffield, 2008. "The Other Margin: Do Minimum Wages Cause Working Hours Adjustments for Low-Wage Workers?," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 75(297), pages 148-167, 02.
    2. Sara Lemos, 2004. "A Menu of Minimum Wage Variables for Evaluating Wages and Employment Effects: Evidence from Brazil," Discussion Papers in Economics, Department of Economics, University of Leicester 04/3, Department of Economics, University of Leicester.
    3. Gonzalo Castex, 2013. "Aumento del Salario Mínimo y sus Efectos sobre el Mercado Laboral," Working Papers Central Bank of Chile, Central Bank of Chile 690, Central Bank of Chile.
    4. Sara Lemos, 2003. "Political Variables as Instruments for the Minimum Wage," Anais do XXXI Encontro Nacional de Economia [Proceedings of the 31th Brazilian Economics Meeting], ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Gr f08, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
    5. Sara Lemos, 2004. "Are Wage and Employment Effects Robust to Alternative Minimum Wage Variables?," Discussion Papers in Economics, Department of Economics, University of Leicester 04/4, Department of Economics, University of Leicester.
    6. David Neumark & Olena Nizalova, 2004. "Minimum Wage Effects in the Longer Run," NBER Working Papers 10656, National Bureau of Economic Research, Inc.
    7. John Schmitt, 2013. "Why Does the Minimum Wage Have No Discernible Effect on Employment?," CEPR Reports and Issue Briefs, Center for Economic and Policy Research (CEPR) 2013-04, Center for Economic and Policy Research (CEPR).
    8. Strobl, Eric & Walsh, Frank, 2011. "The ambiguous effect of minimum wages on hours," Labour Economics, Elsevier, Elsevier, vol. 18(2), pages 218-228, April.
    9. David Neumark & William Wascher, 2006. "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research," NBER Working Papers 12663, National Bureau of Economic Research, Inc.
    10. Gonzalo Castex H., 2012. "Aumento del Salario Mínimo y sus Efectos sobre el Mercado Laboral," Notas de Investigación Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, Central Bank of Chile, vol. 15(2), pages 117-129, August.

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