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The Effect of Recent Increases in the U.S. Minimum Wage: Results from Three Data Sources

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Author Info

  • John T. Addison

    (Department of Economics, Moore School of Business, University of South Carolina, USA; RCEA, Italy)

  • McKinley L. Blackburn

    (Department of Economics, Moore School of Business, University of South Carolina, USA)

  • Chad D. Cotti

    (Department of Economics, University of Wisconsin-Oshkosh, USA)

Abstract

This paper investigates the impact on earnings and employment of substantive increases in the minimum wage under the Fair Minimum Wage Act of 2007. Against the backdrop of a thin contemporary literature offering mixed results, our study uses three different data sets, and three different estimation strategies for addressing geographically-disparate trends. Despite the concatenation of seemingly large wage increases and a soft labor market, our evidence is generally unsupportive of material disemployment effects among industrial and demographic groups typically associated with low-wage employment. Our results are consistent with minimum wage workers being concentrated in sectors of the economy for which the labor-demand response to wage increases is seemingly modest.

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Bibliographic Info

Paper provided by The Rimini Centre for Economic Analysis in its series Working Paper Series with number 58_12.

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Date of creation: Jul 2012
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Handle: RePEc:rim:rimwps:58_12

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Related research

Keywords: minimum wages; disemployment; earnings; low-wage sectors; geographically-disparate employment trends; recession;

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References

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  1. 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.
  2. Saul D. Hoffman & Chenglong Ke, 2010. "Employment Effects of the 2009 Minimum Wage Increase: Evidence from State Comparisons of At-Risk Workers," Working Papers 10-07, University of Delaware, Department of Economics.
  3. Addison, John T. & Blackburn, McKinley L. & Cotti, Chad D., 2009. "Do minimum wages raise employment? Evidence from the U.S. retail-trade sector," Labour Economics, Elsevier, vol. 16(4), pages 397-408, August.
  4. David Neumark & William L. Wascher, 2008. "Minimum Wages," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262141027, December.
  5. Stephen Bazen & Julie Le Gallo, 2009. "The Differential Impact Of Federal And State Minimum Wages On Teenage Employment," Working Papers halshs-00382509, HAL.
  6. Saul D. Hoffman & Chenglong Ke, 2011. "Employment Effects of the 2009 Minimum Wage Increase: Evidence from State Comparisons of At-Risk Workers (Revised Version)," Working Papers 11-16, University of Delaware, Department of Economics.
  7. Hirsch, Barry & Kaufman, Bruce E. & Zelenska, Tetyana, 2011. "Minimum Wage Channels of Adjustment," IZA Discussion Papers 6132, Institute for the Study of Labor (IZA).
  8. 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.
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Cited by:
  1. Addison, John T. & Blackburn, McKinley L., 1998. "Minimum Wages and Poverty," ZEW Discussion Papers 98-42, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

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