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Minimum Wage Shocks, Employment Flows, and Labor Market Frictions

Listed author(s):
  • Arindrajit Dube
  • T. William Lester
  • Michael Reich
Registered author(s):

    We provide the first estimates of the effects of minimum wages on employment flows in the US labor market, identifying the impact by using policy discontinuities at state borders. We find that minimum wages have a sizable negative effect on employment flows but not on stocks. Separations and accessions fall among affected workers, especially those with low tenure. We do not find changes in the duration of nonemployment for separations or hires. This evidence is consistent with search models with endogenous separations.

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    File URL: http://dx.doi.org/10.1086/685449
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    File URL: http://dx.doi.org/10.1086/685449
    Download Restriction: Access to the online full text or PDF requires a subscription.

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    Article provided by University of Chicago Press in its journal Journal of Labor Economics.

    Volume (Year): 34 (2016)
    Issue (Month): 3 ()
    Pages: 663-704

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    Handle: RePEc:ucp:jlabec:doi:10.1086/685449
    Contact details of provider: Web page: http://www.journals.uchicago.edu/JOLE/

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