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State-Level Estimates of Minimum Wage Effects: New Evidence and Interpretations from Disequilibrium Methods

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  • David Neumark
  • William Wascher

Abstract

Research using state-level data to estimate minimum wage effects on employment follows the textbook treatment of minimum wages, assuming that minimum wages are binding and that labor markets are competitive. We present an alternative method of estimating minimum wage effects using similar data that relaxes these assumptions, using a disequilibrium approach. Applying this approach to the data and sample period used in many earlier state-level studies suggests that simple state-level reduced-form estimates of minimum wage effects on employment depend on the sample used, and may badly understate the disemployment effects of a binding minimum wage.

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Bibliographic Info

Article provided by University of Wisconsin Press in its journal Journal of Human Resources.

Volume (Year): 37 (2002)
Issue (Month): 1 ()
Pages: 35-62

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Handle: RePEc:uwp:jhriss:v:37:y:2002:i:1:p:35-62

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Web page: http://jhr.uwpress.org/

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Cited by:
  1. 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.
  2. Addison, John T. & Blackburn, McKinley L. & Cotti, Chad D., 2013. "Minimum wage increases in a recessionary environment," Labour Economics, Elsevier, Elsevier, vol. 23(C), pages 30-39.
  3. Kertesi, Gábor & Köllő, János, 2004. "A 2001. évi minimálbér-emelés foglalkoztatási következményei
    [The employment consequences of the 2001 rise in the minimum wage]
    ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(4), pages 293-324.
  4. Jellal, Mohamed, 2012. "Maroc salaire minimum emploi et pauvreté
    [Morocco minimum wage employment and poverty]
    ," MPRA Paper 38491, University Library of Munich, Germany.
  5. Mary Lopez, 2009. "Incorporating Service-Learning into the Economics Curriculum," The Review of Black Political Economy, Springer, Springer, vol. 36(2), pages 137-149, June.
  6. Nguyen Viet, Cuong, 2010. "The Impact of a Minimum Wage Increase on Employment, Wages and Expenditures of Low-Wage Workers in Vietnam," MPRA Paper 36751, University Library of Munich, Germany, revised 15 Aug 2011.

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