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Dropouts Need Not Apply? The Minimum Wage and Skill Upgrading

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  • Jeffrey Clemens
  • Lisa B. Kahn
  • Jonathan Meer

Abstract

We explore whether minimum wage increases result in substitution from lower-skilled to slightly higher-skilled labor. Using 2011-2016 American Community Survey data (ACS), we show that workers employed in low-wage occupations are older and more likely to have a high school diploma following recent statutory minimum wage increases. To better understand the role of firms, we examine the Burning Glass vacancy data. We find increases in a high school diploma requirement following minimum wage hikes, consistent with our ACS evidence on stocks of employed workers. We see substantial adjustments to requirements both within and across firms.

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  • Jeffrey Clemens & Lisa B. Kahn & Jonathan Meer, 2020. "Dropouts Need Not Apply? The Minimum Wage and Skill Upgrading," NBER Working Papers 27090, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:27090
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    More about this item

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets

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