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Effects of the minimum wage on the nonprofit sector

Author

Listed:
  • Jonathan Meer
  • Hedieh Tajali

Abstract

The nonprofit sector’s ability to absorb increases in labor costs differs from the private sector in a number of ways. We analyse how nonprofits are affected by changes in the minimum wage utilizing data from the Bureau of Labor Statistics and the Internal Revenue Service, linked to state minimum wages. We examine changes in reported employment and volunteering, as well as other financial statements such as revenues and expenses. The results from both datasets show a negative impact on employment for states with large statutory minimum wage increases. We observe some evidence for a reduction in the number of nonprofit establishments, fundraising expenses, and revenues from contributions.

Suggested Citation

  • Jonathan Meer & Hedieh Tajali, 2023. "Effects of the minimum wage on the nonprofit sector," Oxford Economic Papers, Oxford University Press, vol. 75(4), pages 1012-1032.
    • Handle: RePEc:oup:oxecpp:v:75:y:2023:i:4:p:1012-1032.
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    File URL: http://hdl.handle.net/10.1093/oep/gpad024
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    More about this item

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship

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