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Can Rescheduling Explain the New Jersey Minimum Wage Studies?

Author

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  • Thomas R. Michl

    (Department of Economics, Colgate University)

Abstract

This paper interprets the New Jersey minimum wage studies of Card and Krueger and their critics, Neumark and Wascher through a scheduling model. The former found an increase in the number of workers in New Jersey fast-food restaurants after the state minimum wage was increased, while the latter found a decline in the total payroll hours of New Jersey restaurants. The scheduling model predicts that firms will substitute workers for hours per worker after a wage increase, which is consistent with both studies. Evidence from a subset of restaurants which reported both workers and hours data to Neumark and Wascher supports this interpretation.

Suggested Citation

  • Thomas R. Michl, 2000. "Can Rescheduling Explain the New Jersey Minimum Wage Studies?," Eastern Economic Journal, Eastern Economic Association, vol. 26(3), pages 265-276, Summer.
    • Handle: RePEc:eej:eeconj:v:26:y:2000:i:3:p:265-276
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    JEL classification:

    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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