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Are the Effects of Minimum Wage Increases Always Small? A Re-Analysis of Sabia, Burkhauser, and Hansen

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  • SAUL D. HOFFMAN

    ()
    (Department of Economics,University of Delaware)

Abstract

In a recent article, Sabia, Burkhauser, and Hansen report very large negative employment effects of the 2004-2006 increase in the NY state minimum wage on young, less- educated workers. I re-examine their estimates using data from the full CPS, rather than the smaller MORG files they use. I find no evidence whatsoever of a negative employment impact. When the two data sources conflict, there can be no doubt that the full CPS, which is the source of official employment data, is the more appropriate. Furthermore, when I repeat their analysis using three states and the District of Columbia that also had a substantial increase in the state minimum wage, I find evidence of a small positive employment effect.

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File URL: http://www.lerner.udel.edu/sites/default/files/ECON/PDFs/RePEc/dlw/WorkingPapers/2014/UDWP2014-06.pdf
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Bibliographic Info

Paper provided by University of Delaware, Department of Economics in its series Working Papers with number 14-06.

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Length: 25 pages
Date of creation: 2014
Date of revision:
Handle: RePEc:dlw:wpaper:14-06.

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Postal: Purnell Hall, Newark, Delaware 19716
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Web page: http://www.lerner.udel.edu/departments/economics/department-economics/
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Keywords: Minimum Wage;

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  1. Arindrajit Dube & Suresh Naidu & Michael Reich, 2007. "The Economic Effects of a Citywide Minimum Wage," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 60(4), pages 522-543, July.
  2. David Card & John E. DiNardo, 2002. "Skill Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," NBER Working Papers 8769, National Bureau of Economic Research, Inc.
  3. Joseph J. Sabia & Richard V. Burkhauser & Benjamin Hansen, 2012. "Are the Effects of Minimum Wage Increases Always Small? New Evidence from a Case Study of New York State," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 65(2), pages 350-376, April.
  4. Dube, Andrajit & Lester, T. William & Reich, Michael, 2010. "Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties," Institute for Research on Labor and Employment, Working Paper Series qt86w5m90m, Institute of Industrial Relations, UC Berkeley.
  5. David Card & Alan B. Krueger, 1993. "Minimum Wages and Employment: A Case Study of the Fast Food Industry in New Jersey and Pennsylvania," NBER Working Papers 4509, National Bureau of Economic Research, Inc.
  6. John T. Addison & McKinley L. Blackburn & Chad D. Cotti, 2013. "Minimum Wage Increases in a Recessionary Environment," GEMF Working Papers 2013-08, GEMF - Faculdade de Economia, Universidade de Coimbra.
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