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New Estimates of the Effects of Minimum Wages in the U.S. Retail Trade Sector

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Author Info
Addison, John T. () (University of South Carolina)
Blackburn, McKinley L. () (University of South Carolina)
Cotti, Chad D. () (University of Wisconsin, Oshkosh)

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Abstract

This paper examines the impact of minimum wages on earnings and employment in selected branches of the retail-trade sector, 1990-2005, using county-level data on employment and a panel regression framework that allows for county-specific trends in sectoral outcomes. We focus on particular subsectors within retail trade that are identified as particularly low-wage. We find little evidence of disemployment effects once we allow for geographic-specific trends. Rather, in many sectors the evidence suggests modest (but robust) positive employment effects. One explanation we consider for these ‘perverse’ effects is that minimum wages may have significant influences on product demand shifts.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3597.

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Date of creation: Jul 2008
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Publication status: forthcoming in: Labour Economics
Handle: RePEc:iza:izadps:dp3597

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Related research
Keywords: border county analysis; spatial trends; county-level data; wages and employment; minimum wages; unions; right-to-work states;

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Find related papers by JEL classification:
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Peter F. Orazem & J. Peter Mattila, 2002. "Minimum Wage Effects on Hours, Employment, and Number of Firms: The Iowa Case," Journal of Labor Research, Transaction Publishers, vol. 23(1), pages 3-23, January. [Downloadable!] (restricted)
    Other versions:
  2. David Neumark & William Wascher, 1992. "Employment effects of minimum and subminimum wages: Panel data on state minimum wage laws," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 46(1), pages 55-81, October.
  3. David Neumark & William Wascher, 2007. "Does a Higher Minimum Wage Enhance the Effectiveness of The Earned Income Tax Credit?," NBER Working Papers 12915, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. 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. [Downloadable!] (restricted)
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  5. David Neumark & William Wascher, 2007. "Minimum Wages, the Earned Income Tax Credit, and Employment: Evidence from the Post-Welfare Reform Era," IZA Discussion Papers 2610, Institute for the Study of Labor (IZA). [Downloadable!]
  6. Katz, L.F. & Krueger, A.B., 1992. "The Effect of the Minimum Wage on the Fast Food Industry," Harvard Institute of Economic Research Working Papers 1584, Harvard - Institute of Economic Research.
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  7. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2002. "How Much Should We Trust Differences-in-Differences Estimates?," NBER Working Papers 8841, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  8. Kim, Taeil & Taylor, Lowell J, 1995. "The Employment Effect in Retail Trade of California's 1988 Minimum Wage Increase," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 175-82, April.
  9. Deere, Donald & Murphy, Kevin M & Welch, Finis, 1995. "Employment and the 1990-1991 Minimum-Wage Hike," American Economic Review, American Economic Association, vol. 85(2), pages 232-37, May. [Downloadable!] (restricted)
  10. David Card & Lawrence Katz & Alan Krueger, 1993. "Comment on David Neumark and William Wascher, 'Employment Effects of Minimum and Subminimum Wages: Panel Data on State Minimum Wage Laws'," Working Papers 695, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
  11. David Neumark & William Wascher, 1995. "The Effect of New Jersey's Minimum Wage Increase on Fast-Food Employ- ment: A Re-Evaluation Using Payroll Records," NBER Working Papers 5224, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  12. John T. Addison & McKinley L. Blackburn, 1999. "Minimum wages and poverty," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 52(3), pages 393-409, April.
    Other versions:
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