Minimum Wages and Employment
AbstractThis paper investigates the effect of minimum wages on employment using a panel of US state-based data. We estimate a minimalist dynamic version of the specification implied by neo-classical theory. We find statistically and economically significant effects of minimum wages on youth employment. Unlike many other studies we find also significant effects on aggregate state employment. These results re-establish the conventional wisdom as existing before the work of Card-Krueger-Katz. The paper meets the methodological criticisms of this sort of panel study made by CKK. An important econometric innovation in this paper is to produce estimates allowing for cross-sectional correlation, which offers unbiased inference and potential efficiency gains.
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Bibliographic InfoPaper provided by Claremont Colleges in its series Claremont Colleges Working Papers with number 2001-08.
Date of creation: Mar 2001
Date of revision:
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More information through EDIRC
minimum wage; panel data; cross-sectional correlation; factor analysis;
Other versions of this item:
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J39 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Other
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- Neumark, David & Wascher, William, 1995.
"Minimum Wage Effects on Employment and School Enrollment,"
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- William Wascher & David Neumark, 2000. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Comment," American Economic Review, American Economic Association, vol. 90(5), pages 1362-1396, December.
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CEPR Discussion Papers
2490, C.E.P.R. Discussion Papers.
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"Nominal wage rigidity and the rate of inflation,"
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20131, London School of Economics and Political Science, LSE Library.
- Donald Robertson & James Symons, 2000. "Factor Residuals in SUR Regressions: Estimating Panels Allowing for Cross Sectional Correlation," CEP Discussion Papers dp0473, Centre for Economic Performance, LSE.
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- David Neumark & William Wascher, 2006.
"Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research,"
060708, University of California-Irvine, Department of Economics, revised Jan 2007.
- 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.
- Orrenius, Pia M. & Zavodny, Madeline, 2008.
"The Effect of Minimum Wages on Immigrants’ Employment and Earnings,"
IZA Discussion Papers
3499, Institute for the Study of Labor (IZA).
- Pia M. Orrenius & Madeline Zavodny, 2008. "The effect of minimum wages on immigrants' employment and earnings," Working Papers 0805, Federal Reserve Bank of Dallas.
- Calavrezo, Oana & Pelek, Selin, 2011. "Qui sont les salariés payés au niveau du salaire minimum? Une analyse empirique à partir de données turques," GIAM Working Papers 11-2, Galatasaray University Economic Research Center, revised 13 Feb 2011.
- Jellal, Mohamed, 2012.
"Maroc salaire minimum emploi et pauvreté
[Morocco minimum wage employment and poverty]," MPRA Paper 38491, University Library of Munich, Germany.
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