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Parental Labor Supply: Evidence from Minimum Wage Changes

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  • Godoey, Anna
  • Reich, Michael
  • Allegretto, Sylvia A
  • Wursten, Jesse

Abstract

We analyze effects of the minimum wage on the labor supply of parents of young children. Distributional difference-in-differences and event study models document a sharp rise in employment rates of single mothers with children ages 0 to 5 following minimum wage increases. Effects are concentrated among jobs paying close to the minimum wage. We find corresponding drops in the probability of staying out of the labor force to care for family members. Results are consistent with simple labor supply models in which childcare costs create barriers to employment. Minimum wage increases then enable greater labor force participation and reduce child poverty.

Suggested Citation

  • Godoey, Anna & Reich, Michael & Allegretto, Sylvia A & Wursten, Jesse, 2021. "Parental Labor Supply: Evidence from Minimum Wage Changes," Institute for Research on Labor and Employment, Working Paper Series qt0kq199kd, Institute of Industrial Relations, UC Berkeley.
    • Handle: RePEc:cdl:indrel:qt0kq199kd
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    Cited by:

    1. Shirlee Lichtman-Sadot, 2023. "Men Too: The Effects of Welfare Payment Time Limits on Male Labor Market Outcomes," Working Papers 2303, Ben-Gurion University of the Negev, Department of Economics.
    2. Brown, Jessica H. & Herbst, Chris M., 2023. "Minimum Wage, Worker Quality, and Consumer Well-Being: Evidence from the Child Care Market," IZA Discussion Papers 16257, Institute of Labor Economics (IZA).
    3. Arindrajit Dube & Attila Lindner, 2024. "Minimum Wages in the 21st Century," RF Berlin - CReAM Discussion Paper Series 2425, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    4. Wursten, Jesse & Reich, Michael, 2023. "Racial inequality in frictional labor markets: Evidence from minimum wages," Labour Economics, Elsevier, vol. 82(C).
    5. Arindrajit Dube & Ben Zipperer, 2024. "Own-Wage Elasticity: Quantifying the Impact of Minimum Wages on Employment," NBER Working Papers 32925, National Bureau of Economic Research, Inc.
    6. Hampton, Matt & Totty, Evan, 2023. "Minimum wages, retirement timing, and labor supply," Journal of Public Economics, Elsevier, vol. 224(C).

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    More about this item

    Keywords

    Social and Behavioral Sciences; Center on Wage and Employment Dynamics; minimum wage; living wage;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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