Minimum Wage Increases in a Soft U.S. Economy
AbstractDo apparently large minimum wage increases in an environment of straightened economic circumstances produce clearer evidence of disemployment effects than is typically reported in the new economics of the minimum wage? The present paper augments the sparse literature covering the very latest increases in the U.S. minimum wage, using three different data sets and the principal estimation strategies for handling geographically-disparate trends. Despite the seemingly more favorable milieu for identifying displacement effects, and although our treatment calls into question one well-received estimation strategy, our preferred specification generally fails to support a finding of negative employment effects. That is to say, minimum-wage workers are apparently concentrated in sectors of the economy for which the labor demand response to statutory wage hikes is minimal. Popular concern with a “recessionary multiplier” thus seems overdone.
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Bibliographic InfoPaper provided by Institute for Advanced Studies in its series Economics Series with number 273.
Length: 40 pages
Date of creation: Sep 2011
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Find related papers by JEL classification:
- J2 - Labor and Demographic Economics - - Demand and Supply of Labor
- J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
- J4 - Labor and Demographic Economics - - Particular Labor Markets
- J8 - Labor and Demographic Economics - - Labor Standards
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-10-01 (All new papers)
- NEP-HME-2011-10-01 (Heterodox Microeconomics)
- NEP-LAB-2011-10-01 (Labour Economics)
- NEP-LMA-2011-10-01 (Labor Markets - Supply, Demand, & Wages)
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