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Minimum wage effects on hours, employment, and number of firms: The iowa case

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  • Orazem, Peter F.
  • Mattila, J. Peter

Abstract

V. Conclusions Our results show that minimum wages reduce employment opportunities for workers. Like the early studies, our county-level (more aggregate) estimates imply fairly modest impacts with elasticities of approximately -0.1. However, our firm-level estimates for subminimum workers imply much more elastic responses. In particular, hours elasticities are in the elastic range.

Suggested Citation

  • Orazem, Peter F. & Mattila, J. Peter, 2002. "Minimum wage effects on hours, employment, and number of firms: The iowa case," ISU General Staff Papers 200201010800001286, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:200201010800001286
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    1. John T. Addison & McKinley L. Blackburn & Chad D. Cotti, 2012. "The Effect of Minimum Wages on Labour Market Outcomes: County-Level Estimates from the Restaurant-and-Bar Sector," British Journal of Industrial Relations, London School of Economics, vol. 50(3), pages 412-435, September.
    2. Drucker, Lev & Mazirov, Katya & Neumark, David, 2021. "Who pays for and who benefits from minimum wage increases? Evidence from Israeli tax data on business owners and workers," Journal of Public Economics, Elsevier, vol. 199(C).
    3. Katharine C. Sadowski, 2025. "The Effect of the Minimum Wage on Childcare Establishments," Working Papers 25-53, Center for Economic Studies, U.S. Census Bureau.
    4. Dale L. Belman & Paul Wolfson, 2010. "The Effect of Legislated Minimum Wage Increases on Employment and Hours: A Dynamic Analysis," LABOUR, CEIS, vol. 24(1), pages 1-25, March.
    5. Céspedes, Nikita & Sánchez, Alan, 2013. "Minimum Wage and Job Mobility," Working Papers 2013-012, Banco Central de Reserva del Perú.
    6. Addison, John T. & Blackburn, McKinley L. & Cotti, Chad D., 2009. "Do minimum wages raise employment? Evidence from the U.S. retail-trade sector," Labour Economics, Elsevier, vol. 16(4), pages 397-408, August.
    7. Addison, John T. & Blackburn, McKinley L. & Cotti, Chad, 2008. "New Estimates of the Effects of Minimum Wages in the U.S. Retail Trade Sector," IZA Discussion Papers 3597, Institute of Labor Economics (IZA).
    8. Jose Caraballo†Cueto, 2016. "Is there a minimum wage biting in Puerto Rico? Updating the debate," Industrial Relations Journal, Wiley Blackwell, vol. 47(5-6), pages 513-529, November.
    9. Christian Ragacs, 2003. "Mindestlöhne und Beschäftigung: Ein Überblick über die neuere empirische Literatur," Working Papers geewp25, Vienna University of Economics and Business Research Group: Growth and Employment in Europe: Sustainability and Competitiveness.
    10. Luca Colombo & Paola Labrecciosa & Luca Lambertini, 2008. "Are optimal punishments always optimal?," Working Paper series 01_08, Rimini Centre for Economic Analysis.
    11. Dale Belman & Paul Wolfson & Kritkorn Nawakitphaitoon, 2015. "Who Is Affected by the Minimum Wage?," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 54(4), pages 582-621, October.
    12. Nicole Coomer & Walter Wessels, 2013. "The Effect of the Minimum Wage on Covered Teenage Employment," Journal of Labor Research, Springer, vol. 34(3), pages 253-280, September.
    13. Addison, John T. & Blackburn, McKinley L. & Cotti, Chad, 2008. "The Effect of Minimum Wages on Wages and Employment: County-Level Estimates for the United States," IZA Discussion Papers 3300, Institute of Labor Economics (IZA).
    14. Jeffrey P. Thompson, 2009. "Using Local Labor Market Data to Re-Examine the Employment Effects of the Minimum Wage," ILR Review, Cornell University, ILR School, vol. 62(3), pages 343-366, April.
    15. Arindrajit Dube & Attila Lindner, 2024. "Minimum Wages in the 21st Century," RFBerlin Discussion Paper Series 2425, ROCKWOOL Foundation Berlin (RFBerlin).
    16. David Neumark & Peter Shirley, 2022. "Myth or measurement: What does the new minimum wage research say about minimum wages and job loss in the United States?," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 61(4), pages 384-417, October.
    17. Rohlin, Shawn M., 2011. "State minimum wages and business location: Evidence from a refined border approach," Journal of Urban Economics, Elsevier, vol. 69(1), pages 103-117, January.
    18. Qianqian Yang & Nobuaki Hamaguchi, 2025. "Revisiting Minimum Wage: From Labor Economics to Spatial Economics," Discussion Paper Series DP2025-08, Research Institute for Economics & Business Administration, Kobe University.
    19. Li, Xiaoying & Shi, Dongbo & Zhou, Sifan, 2023. "The minimum wage and the locations of new business entries in China: Estimates based on a refined border approach," Regional Science and Urban Economics, Elsevier, vol. 99(C).
    20. Laporšek, Suzana & Orazem, Peter F. & Vodopivec, Milan & Vodopivec, Matija, 2024. "Long-term responses to large minimum wage shocks: Subminimum and super-minimum workers in Slovenia," Economic Systems, Elsevier, vol. 48(4).

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