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The Short‐Run Employment Effects Of Recent Minimum Wage Changes: Evidence From The American Community Survey

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  • Jeffrey Clemens
  • Michael R. Strain

Abstract

This paper presents early evidence on the employment effects of state minimum wage increases enacted between January 2013 and January 2015. As of 2015, we estimate that relatively large minimum wage increases (defined as those exceeding $1) reduced employment among low‐skilled population groups by just over 1 percentage point. Smaller minimum wage increases, as well as increases linked to inflation indexation provisions, appear to have had much smaller (and possibly positive) effects on employment over our sample period. The estimates thus raise the potential importance of nonlinearities in the minimum wage's effects, which are consistent with standard models of the labor market. (JEL H11, J08, J23)

Suggested Citation

  • Jeffrey Clemens & Michael R. Strain, 2018. "The Short‐Run Employment Effects Of Recent Minimum Wage Changes: Evidence From The American Community Survey," Contemporary Economic Policy, Western Economic Association International, vol. 36(4), pages 711-722, October.
    • Handle: RePEc:bla:coecpo:v:36:y:2018:i:4:p:711-722
    DOI: 10.1111/coep.12279
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    References listed on IDEAS

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    1. Sylvia Allegretto & Arindrajit Dube & Michael Reich & Ben Zipperer, 2017. "Credible Research Designs for Minimum Wage Studies," ILR Review, Cornell University, ILR School, vol. 70(3), pages 559-592, May.
    2. Joseph J. Sabia & Richard V. Burkhauser & Benjamin Hansen, 2012. "Are the Effects of Minimum Wage Increases Always Small? New Evidence from a Case Study of New York State," ILR Review, Cornell University, ILR School, vol. 65(2), pages 350-376, April.
    3. Hoffman Saul D., 2014. "Employment Effects of the 2009 Minimum Wage Increase: New Evidence from State-Based Comparisons of Workers by Skill Level," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 14(3), pages 695-721, July.
    4. Michael R. Strain & Jeffrey Clemens, 2017. "Estimating the employment effects of recent minimum wage changes: Early evidence, an interpretative framework, and a pre-commitment to future analysis," AEI Economics Working Papers 914893, American Enterprise Institute.
    5. Michael R. Strain & Peter Brummund, 2016. "Real and permanent minimum wages," AEI Economics Working Papers 875967, American Enterprise Institute.
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    More about this item

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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