Are the Effects of Minimum Wage Increases Always Small? New Evidence from a Case Study of New York State
AbstractThe authors estimate the effect of the 2004?6 New York State (NYS) minimum wage increase from $5.15 to $6.75 per hour on the employment rates of 16- to 29-year-olds who do not have a high school diploma. Using data drawn from the 2004 and 2006 Current Population Survey, they employ difference-in-difference estimates to show that the NYS minimum wage increase is associated with a 20.2% to 21.8% reduction in the employment of less-skilled, less-educated workers, with the largest effects on those aged 16 to 24. Their estimates imply a median employment elasticity with respect to the minimum wage of around ?0.7, large relative to previous researchers' estimates. The authors' findings are robust to their choice of geographically proximate comparison states, the use of a more highly skilled within-state comparison group, and a synthetic control design approach. Moreover, their results provide plausible evidence that state minimum wage increases can have substantial adverse labor demand effects for low-skilled individuals that are outside previous elasticity estimates, ranging from ?0.1 to ?0.3.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by ILR Review, Cornell University, ILR School in its journal ILR Review.
Volume (Year): 65 (2012)
Issue (Month): 2 (April)
Postal: 381 Ives East, Cornell University, Ithaca, NY 14853-3901
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Saul D. Hoffman, 2014. "Are the Effects of Minimum Wage Increases Always Small? A Re-Analysis of Sabia, Burkhauser, and Hansen," Working Papers 14-06, University of Delaware, Department of Economics.
- John Schmitt, 2013. "Why Does the Minimum Wage Have No Discernible Effect on Employment?," CEPR Reports and Issue Briefs 2013-04, Center for Economic and Policy Research (CEPR).
- Minimum wage in Wikipedia (English)
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ILR Review).
If references are entirely missing, you can add them using this form.