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Minimum Wages and Employment in France and the United States

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  • John M. Abowd
  • Francis Kramarz
  • David N. Margolis

Abstract

We use longitudinal individual wage and employment data in France and the United States to investigate the effect of changes in the real minimum wage on an individual's employment status. We find that movements in both French and American real minimum wages are associated with mild employment effects in general and very strong effects on workers employed at the minimum wage. In the French case, a 1% increase in the real minimum wage decreases the future employment probability of a man (respectively, a woman) currently employed at the minimum wage by 1.3% (1.0%). In the United States, a decrease in the real minimum wage of 1% increases the probability that a man (woman) employed at the minimum wage came from unemployment in the previous year by 0.4% (1.6%).

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6996.

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Date of creation: Mar 1999
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Publication status: published as John M. Abowd & Francis Kramarz & Thomas Lemieux & David N. Margolis, 2000. "Minimum Wages and Youth Employment in France and the United States," NBER Chapters, in: Youth Employment and Joblessness in Advanced Countries, pages 427-472 National Bureau of Economic Research, Inc.
Handle: RePEc:nbr:nberwo:6996

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  1. Abowd, John M & Corbel, Patrick & Kramarz, Francis, 1997. "The Entry and Exit of Workers and the Growth of Employment: An Analysis of French Establishments," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1765, C.E.P.R. Discussion Papers.
  2. David Card & Alan Krueger, 1997. "A Reanalysis of the Effect of the New Jersey Minimum Wage Increase on the Fast-Food Industry with Representative Payroll Data," Working Papers, Princeton University, Department of Economics, Industrial Relations Section. 772, Princeton University, Department of Economics, Industrial Relations Section..
  3. Abowd, J.M. & Kramarz, F. & Margolis, D.N., 1998. "Minimum Wages and Employment in France and the United States," Papiers du Laboratoire de Microéconomie Appliquée, Université Panthéon-Sorbonne (Paris 1) 1998-12, Université Panthéon-Sorbonne (Paris 1).
  4. Kramarz, Francis & Philippon, Thomas, 2000. "The Impact of Differential Payroll Tax Subsidies on Minimum Wage Employment," IZA Discussion Papers 219, Institute for the Study of Labor (IZA).
  5. Card, David & Lemieux, Thomas, 1996. "Wage dispersion, returns to skill, and black-white wage differentials," Journal of Econometrics, Elsevier, Elsevier, vol. 74(2), pages 319-361, October.
  6. John M. Abowd & Michael Bognanno, 1995. "International Differences in Executive and Managerial Compensation," NBER Chapters, in: Differences and Changes in Wage Structures, pages 67-104 National Bureau of Economic Research, Inc.
  7. Brown, Charles & Gilroy, Curtis & Kohen, Andrew, 1982. "The Effect of the Minimum Wage on Employment and Unemployment," Journal of Economic Literature, American Economic Association, vol. 20(2), pages 487-528, June.
  8. 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.
  9. Abowd, J.M. & Kramarz, F. & Margolis, D.N., 1995. "High-Wage Workers and High-Wage Firms," Cahiers de recherche, Universite de Montreal, Departement de sciences economiques 9503, Universite de Montreal, Departement de sciences economiques.
  10. Topel, Robert H & Ward, Michael P, 1992. "Job Mobility and the Careers of Young Men," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 107(2), pages 439-79, May.
  11. John M. Abowd & Francis Kramarz & Thomas Lemieux & David N. Margolis, 2000. "Minimum Wages and Youth Employment in France and the United States," NBER Chapters, in: Youth Employment and Joblessness in Advanced Countries, pages 427-472 National Bureau of Economic Research, Inc.
  12. Stephen Machin & Alan Manning, 1992. "Minimum Wages," CEP Discussion Papers dp0080, Centre for Economic Performance, LSE.
  13. Anne Sérandon & Denis Fougère & Liliane Bonnal, 1994. "L'impact des dispositifs d'emploi sur le devenir des jeunes chômeurs : une évaluation économétrique sur données longitudinales," Économie et Prévision, Programme National Persée, Programme National Persée, vol. 115(4), pages 1-28.
  14. Bell, David N.F. & Blanchflower, David G., 2011. "Youth Unemployment in Europe and the United States," IZA Discussion Papers 5673, Institute for the Study of Labor (IZA).
  15. Linneman, Peter, 1982. "The Economic Impacts of Minimum Wage Laws: A New Look at an Old Question," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 90(3), pages 443-69, June.
  16. Chinhui Juhn & Kevin M. Murphy & Robert H. Topel, 1991. "Why Has the Natural Rate of Unemployment Increased over Time?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(2), pages 75-142.
  17. 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, Cornell University, ILR School, vol. 46(1), pages 55-81, October.
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