Using Local Labor Market Data to Re-Examine the Employment Effects of the Minimum Wage
AbstractUsing quarterly Census data for 1996-2000, the author evaluates how minimum wages affected teenage employment at the county level. An analysis that includes all counties yields small and statistically insignificant effects, consistent with previous research using state panels. However, in counties where the minimum wage was likely binding (above the market-clearing wage for teens), the negative impact on employment was considerably larger. The effect was strongest in small counties, was restricted to “transitory” jobs and new hires, and apparently was not experienced by young adults ages 19-22. The small employment effects found in much of the literature, the author argues, at least partly reflect the estimates’ inclusion of local labor markets where the minimum wage is not binding. By averaging the effects across all areas, with no disaggregation based on where the minimum wage is binding and where it is not, these studies overlook important regional variation.
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Bibliographic InfoArticle provided by ILR Review, Cornell University, ILR School in its journal ILR Review.
Volume (Year): 62 (2009)
Issue (Month): 3 (April)
Postal: 381 Ives East, Cornell University, Ithaca, NY 14853-3901
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- Dube, Arindrajit & Lester, T. William & Reich, Michael, 2011.
"Do Frictions Matter in the Labor Market? Accessions, Separations and Minimum Wage Effects,"
IZA Discussion Papers
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- David Neumark & J.M. Ian Salas & William Wascher, 2013.
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NBER Working Papers
18681, National Bureau of Economic Research, Inc.
- 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 for the Study of Labor (IZA).
- Allegretto, Sylvia & Dube, Arindrajit & Reich, Michael, 2009. "Spatial Heterogeneity and Minimum Wages: Employment Estimates for Teens Using Cross-State Commuting Zones," Institute for Research on Labor and Employment, Working Paper Series qt1x99m65f, Institute of Industrial Relations, UC Berkeley.
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