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The Employment Effect in Retail Trade of California's 1988 Minimum Wage Increase


  • Kim, Taeil
  • Taylor, Lowell J


This paper considers the labor market effect of California's 1988 minimum wage increase in the retail trade industry. Two sources of variation--county variation and cross-industry variation--are exploited in estimating the effect of the minimum wage change. Both empirical approaches suggest that the textbook economic analysis of minimum wages pertains; employment growth in California's low-wage retail trade sector appears to have been tempered by the minimum wage increase.

Suggested Citation

  • 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 175-182, April.
  • Handle: RePEc:bes:jnlbes:v:13:y:1995:i:2:p:175-82

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    References listed on IDEAS

    1. David Card, 1991. "Do Minimum Wages Reduce Employment? A Case Study of California, 1987-89," NBER Working Papers 3710, National Bureau of Economic Research, Inc.
    2. Tauchen, George E, 1981. "Some Evidence on Cross-Sector Effects of the Minimum Wage," Journal of Political Economy, University of Chicago Press, vol. 89(3), pages 529-547, June.
    3. Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-793, September.
    4. repec:fth:prinin:315 is not listed on IDEAS
    5. David Neumark & William Wascher, 1994. "Minimum Wage Effects and Low-Wage Labor Markets: A Disequilibrium Approach," NBER Working Papers 4617, National Bureau of Economic Research, Inc.
    6. Ragan, James F, Jr, 1977. "Minimum Wages and the Youth Labor Market," The Review of Economics and Statistics, MIT Press, vol. 59(2), pages 129-136, May.
    7. Richard B. Freeman, 1982. "Economic Determinants of Geographic and Individual Variation in the Labor Market Position of Young Persons," NBER Chapters,in: The Youth Labor Market Problem: Its Nature, Causes, and Consequences, pages 115-154 National Bureau of Economic Research, Inc.
    8. Mincer, Jacob, 1976. "Unemployment Effects of Minimum Wages," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 87-104, August.
    9. David Card & Lawrence Katz & Alan B. 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..
    10. David Neumark & William Wascher, 1993. "Employment Effects of Minimum and Subminimum Wages: Reply to Card, Katz and Krueger," NBER Working Papers 4570, National Bureau of Economic Research, Inc.
    11. Ronald G. Ehrenberg & Alan J. Marcus, 1982. "Minimum Wages and Teenagers' Enrollment-Employment Outcomes: A Multinomial Logit Model," Journal of Human Resources, University of Wisconsin Press, vol. 17(1), pages 39-58.
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    Cited by:

    1. Jeffrey Clemens, 2015. "The Minimum Wage and the Great Recession: Evidence from the Current Population Survey," NBER Working Papers 21830, National Bureau of Economic Research, Inc.
    2. John T. Addison & McKinley L. Blackburn & Chad D. Cotti, 2012. "The Effect of Minimum Wages on Labour Market Outcomes: County-Level Estimates from the Restaurant-and-Bar Sector," British Journal of Industrial Relations, London School of Economics, vol. 50(3), pages 412-435, September.
    3. Jeffrey Clemens & Michael Wither, 2014. "The Minimum Wage and the Great Recession: Evidence of Effects on the Employment and Income Trajectories of Low-Skilled Workers," NBER Working Papers 20724, National Bureau of Economic Research, Inc.
    4. Daniel Aaronson & Eric French, 2007. "Product Market Evidence on the Employment Effects of the Minimum Wage," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 167-200.
    5. Chung-cheng Lin, 2001. "A Comment on "Labor Markets, Unemployment, and Minimum Wages: A New View."," Eastern Economic Journal, Eastern Economic Association, vol. 27(1), pages 71-82, Winter.
    6. 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.
    7. Addison, John T. & Blackburn, McKinley L. & Cotti, Chad, 2008. "New Estimates of the Effects of Minimum Wages in the U.S. Retail Trade Sector," IZA Discussion Papers 3597, Institute for the Study of Labor (IZA).
    8. repec:eee:labchp:v:3:y:1999:i:pb:p:2101-2163 is not listed on IDEAS
    9. Kane, John, 1997. "Myth and measurement: The new economics of the minimum wage : David Card and Alan B. Krueger, New Jersey: Princeton University Press, 1995, x + 422," International Review of Economics & Finance, Elsevier, vol. 6(2), pages 219-222.
    10. Luca Colombo & Paola Labrecciosa & Luca Lambertini, 2008. "Are optimal punishments always optimal?," Working Paper series 01_08, Rimini Centre for Economic Analysis.
    11. Lundborg , Per & Skedinger, Per, 2014. "Minimum Wages and the Integration of Refugee Immigr ants," Working Paper Series 4/14, Stockholm University, Swedish Institute for Social Research.
    12. János Köllö, 2010. "Hungary: The Consequences of Doubling the Minimum Wage," Chapters,in: The Minimum Wage Revisited in the Enlarged EU, chapter 8 Edward Elgar Publishing.
    13. Larry D. Singell & James R. Terborg, 2007. "Employment Effects Of Two Northwest Minimum Wage Initiatives," Economic Inquiry, Western Economic Association International, vol. 45(1), pages 40-55, January.
    14. Madeline Zavodny, 1998. "Why minimum wage hikes may not reduce employment," Economic Review, Federal Reserve Bank of Atlanta, issue Q 2, pages 18-28.
    15. Ekaterina Jardim & Mark C. Long & Robert Plotnick & Emma van Inwegen & Jacob Vigdor & Hilary Wething, 2017. "Minimum Wage Increases, Wages, and Low-Wage Employment: Evidence from Seattle," NBER Working Papers 23532, National Bureau of Economic Research, Inc.

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