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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. Isaac Sorkin, 2015. "Are There Long-Run Effects of the Minimum Wage?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 18(2), pages 306-333, April.
    3. 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.
    4. 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 1-27, July.
    5. 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.
    6. David Neumark, 2017. "The Employment Effects of Minimum Wages: Some Questions We Need to Answer," NBER Working Papers 23584, National Bureau of Economic Research, Inc.
    7. 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.
    8. Clemens, Jeffrey & Wither, Michael, 2019. "The minimum wage and the Great Recession: Evidence of effects on the employment and income trajectories of low-skilled workers," Journal of Public Economics, Elsevier, vol. 170(C), pages 53-67.
    9. Michael R. Strain & Peter Brummund, 2016. "Real and permanent minimum wages," AEI Economics Working Papers 875967, American Enterprise Institute.
    10. French, Eric Baird & Aaronson, Daniel & Sorkin, Isaac, 2016. "Industry Dynamics and the Minimum Wage: A Putty-Clay Approach," CEPR Discussion Papers 11097, C.E.P.R. Discussion Papers.
    Full references (including those not matched with items on IDEAS)

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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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