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The minimum wage and annual earnings inequality

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  • Engelhardt, Gary V.
  • Purcell, Patrick J.

Abstract

We estimate the impact of the minimum wage on U.S. male annual earnings inequality, using administrative Social Security earnings records from 1981–2015. The minimum wage reduces inequality in the bottom quartile of the earnings distribution, and especially in the bottom decile.

Suggested Citation

  • Engelhardt, Gary V. & Purcell, Patrick J., 2021. "The minimum wage and annual earnings inequality," Economics Letters, Elsevier, vol. 207(C).
    • Handle: RePEc:eee:ecolet:v:207:y:2021:i:c:s0165176521002780
    DOI: 10.1016/j.econlet.2021.110001
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    References listed on IDEAS

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    1. Lillard, Lee & Smith, James P & Welch, Finis, 1986. "What Do We Really Know about Wages? The Importance of Nonreporting and Census Imputation," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 489-506, June.
    2. David H. Autor & Alan Manning & Christopher L. Smith, 2016. "The Contribution of the Minimum Wage to US Wage Inequality over Three Decades: A Reassessment," American Economic Journal: Applied Economics, American Economic Association, vol. 8(1), pages 58-99, January.
    3. Joseph P. Romano & Michael Wolf, 2005. "Exact and Approximate Stepdown Methods for Multiple Hypothesis Testing," Journal of the American Statistical Association, American Statistical Association, vol. 100, pages 94-108, March.
    4. Thomas Lemieux, 2006. "Increasing Residual Wage Inequality: Composition Effects, Noisy Data, or Rising Demand for Skill?," American Economic Review, American Economic Association, vol. 96(3), pages 461-498, June.
    5. David Neumark & DMark Schweitzer & DaWilliam Wascher, 2004. "Minimum Wage Effects throughout the Wage Distribution," Journal of Human Resources, University of Wisconsin Press, vol. 39(2).
    6. Christopher R. Bollinger & Barry T. Hirsch & Charles M. Hokayem & James P. Ziliak, 2019. "Trouble in the Tails? What We Know about Earnings Nonresponse 30 Years after Lillard, Smith, and Welch," Journal of Political Economy, University of Chicago Press, vol. 127(5), pages 2143-2185.
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    Cited by:

    1. Cut Risya Varlitya & Raja Masbar & Abd. Jamal & Muhammad Nasir, 2023. "Do Regional Macroeconomics Variables Influence the Income Inequality in Indonesia?," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 180-199.
    2. Nguyen Thi, Hai Ninh, 2021. "Vietnam labour policies and its impact on rural wages: an experience from hired farm labourers in the Red River Delta," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 7(4), December.

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    Keywords

    Minimum wage; Earnings inequality;

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