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Minimum Wage Increases Under Straightened Circumstances

Author

Listed:
  • Addison, John T.

    () (University of South Carolina)

  • Blackburn, McKinley L.

    () (University of South Carolina)

  • Cotti, Chad

    () (University of Wisconsin, Oshkosh)

Abstract

Do apparently large minimum wage increases in an environment of recession produce clearer evidence of disemployment effects than is typically observed in the new minimum wage literature? This paper augments the sparse literature on the most recent increases in the U.S. minimum wage, using three different data sets and the two main estimation strategies for handling geographically-disparate trends. The evidence is generally unsupportive of negative employment effects, still less of a 'recessionary multiplier.' Minimum wage workers seem to be concentrated in sectors of the economy for which the labor demand response to wage mandates is minimal.

Suggested Citation

  • Addison, John T. & Blackburn, McKinley L. & Cotti, Chad, 2011. "Minimum Wage Increases Under Straightened Circumstances," IZA Discussion Papers 6036, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp6036
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    References listed on IDEAS

    as
    1. Allegretto, Sylvia & Dube, Arindrajit & Reich, Michael, 2010. "Do Minimum Wages Really Reduce Teen Employment? Accounting for Heterogeneity and Selectivity in State Panel Data," Institute for Research on Labor and Employment, Working Paper Series qt7jq2q3j8, Institute of Industrial Relations, UC Berkeley.
    2. David Neumark & William Wascher, 2006. "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research," NBER Working Papers 12663, National Bureau of Economic Research, Inc.
    3. repec:rim:rimwps:02-08 is not listed on IDEAS
    4. 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.
    5. Sylvia A. Allegretto & Arindrajit Dube & Michael Reich, 2011. "Do Minimum Wages Really Reduce Teen Employment? Accounting for Heterogeneity and Selectivity in State Panel Data," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 50(2), pages 205-240, April.
    6. David Card, 1992. "Using Regional Variation in Wages to Measure the Effects of the Federal Minimum Wage," ILR Review, Cornell University, ILR School, vol. 46(1), pages 22-37, October.
    7. David Neumark & William Wascher, 2011. "Does a Higher Minimum Wage Enhance the Effectiveness of the Earned Income Tax Credit?," ILR Review, Cornell University, ILR School, vol. 64(4), pages 712-746, July.
    8. Arindrajit Dube & T. William Lester & Michael Reich, 2010. "Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 945-964, November.
    Full references (including those not matched with items on IDEAS)

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Minimum Wage Increases Under Straightened Circumstances
      by maximorossi in NEP-LTV blog on 2011-11-03 17:13:26

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    Cited by:

    1. Allegretto, Sylvia & Dube, Arindrajit & Reich, Michael & Zipperer, Ben, 2013. "Credible Research Designs for Minimum Wage Studies," Institute for Research on Labor and Employment, Working Paper Series qt3hk7s3fw, Institute of Industrial Relations, UC Berkeley.
    2. Barry T. Hirsch & Bruce E. Kaufman & Tetyana Zelenska, 2015. "Minimum Wage Channels of Adjustment," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 54(2), pages 199-239, April.

    More about this item

    Keywords

    geographically-disparate employment trends; minimum wages; earnings; low-wage sectors; recession; disemployment;

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J4 - Labor and Demographic Economics - - Particular Labor Markets
    • J8 - Labor and Demographic Economics - - Labor Standards

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