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The employment elasticity of the minimum wage. Is it just politics after all?

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  • Jesse Wursten

Abstract

The effect of minimum wages on employment is highly disputed. The main questions in the literature are on how to deal with spatial heterogeneity and dynamics. We use statistical (multi-factor error models) and economic (political ideology as control variable) methods to address the first. Furthermore, we extend the models to a dynamic setting to estimate more long term effects. We find that these enriched models all suggest there are no economically significant negative employment effects attached to moderate increases in the minimum wage.

Suggested Citation

  • Jesse Wursten, 2017. "The employment elasticity of the minimum wage. Is it just politics after all?," Working Papers of Department of Management, Strategy and Innovation, Leuven 591940, KU Leuven, Faculty of Economics and Business (FEB), Department of Management, Strategy and Innovation, Leuven.
    • Handle: RePEc:ete:msiper:591940
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