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The Wage and Employment Dynamics of Minimum Wage Workers

  • William E. Even


    (Department of Economics, Miami University)

  • David A. Macpherson


    (Department of Economics, Florida State University)

This study uses panel data to examine the wage and employment dynamics of minimum wage workers. Compared with workers earning above the minimum, minimum wage workers are much more likely to be new entrants or to exit the labor market. Changes in industry, occupation, and access to job training are particularly important to improving the wages of minimum wage workers. Many minimum wage workers earn less than their potential wage temporarily because of nonwork circumstances that make higher-paying jobs less attractive.

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Article provided by Southern Economic Association in its journal Southern Economic Journal.

Volume (Year): 69 (2003)
Issue (Month): 3 (January)
Pages: 676-690

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Handle: RePEc:sej:ancoec:v:69:3:y:2003:p:676-690
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  1. Joseph Altonji & R. Shakotko, 1985. "Do Wages Rise with Job Seniority?," Working Papers 567, Princeton University, Department of Economics, Industrial Relations Section..
  2. Hashimoto, Masanori, 1982. "Minimum Wage Effects on Training on the Job," American Economic Review, American Economic Association, vol. 72(5), pages 1070-87, December.
  3. Acemoglu, Daron & Pischke, Jörn-Steffen, 2001. "Minimum Wages and On-the-Job Training," IZA Discussion Papers 384, Institute for the Study of Labor (IZA).
  4. Peter Gottschalk, 2001. "Wage Mobility within and between Jobs," LoWER Working Papers wp1, AIAS, Amsterdam Institute for Advanced Labour Studies.
  5. Ralph E. Smith & Bruce Vavrichek, 1992. "The wage mobility of minimum wage workers," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 46(1), pages 82-88, October.
  6. Peter Gottschalk, 2000. "Wage Mobility within and between Jobs," Boston College Working Papers in Economics 486, Boston College Department of Economics, revised 03 Apr 2001.
  7. Ralph E. Smith & Bruce Vavrichek, 1992. "The Wage Mobility of Minimum Wage Workers," ILR Review, Cornell University, ILR School, vol. 46(1), pages 82-88, October.
  8. Mellow, Wesley & Sider, Hal, 1983. "Accuracy of Response in Labor Market Surveys: Evidence and Implications," Journal of Labor Economics, University of Chicago Press, vol. 1(4), pages 331-44, October.
  9. Topel, Robert H, 1991. "Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority," Journal of Political Economy, University of Chicago Press, vol. 99(1), pages 145-76, February.
  10. Macpherson, David A & Hirsch, Barry T, 1995. "Wages and Gender Composition: Why Do Women's Jobs Pay Less?," Journal of Labor Economics, University of Chicago Press, vol. 13(3), pages 426-71, July.
  11. Adam J. Grossberg & Paul Sicilian, 1999. "Minimum Wages, On-the-Job Training, and Wage Growth," Southern Economic Journal, Southern Economic Association, vol. 65(3), pages 539-556, January.
  12. James Long, 1999. "Updated estimates of the wage mobility of minimum wage workers," Journal of Labor Research, Springer, vol. 20(4), pages 493-503, December.
  13. James J. Heckman, 1976. "The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 475-492 National Bureau of Economic Research, Inc.
  14. Loprest, Pamela J, 1992. "Gender Differences in Wage Growth and Job Mobility," American Economic Review, American Economic Association, vol. 82(2), pages 526-32, May.
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