IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/4757.html
   My bibliography  Save this paper

The Effect of the Minimum Wage When It Really Bites: A Reexamination of the Evidence from Puerto Rico

Author

Listed:
  • Alan B. Krueger

Abstract

This paper reinvestigates the evidence on the impact of the minimum wage on employment in Puerto Rico. The strongest evidence that the minimum wage had a negative effect on employment comes from an aggregate time series analysis. The weakest evidence comes from cross-industry analyses. The main finding of the paper, however, is that the statistical evidence of a negative employment effect of the minimum wage in Puerto Rico is surprisingly fragile.

Suggested Citation

  • Alan B. Krueger, 1994. "The Effect of the Minimum Wage When It Really Bites: A Reexamination of the Evidence from Puerto Rico," NBER Working Papers 4757, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:4757
    Note: LS
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w4757.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-793, September.
    2. Borjas, George J. & Freeman, Richard B. (ed.), 1992. "Immigration and the Work Force," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226066332, December.
    3. 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.
    4. Lloyd G. Reynolds, 1965. "Wages, Productivity and Industrialization," International Economic Association Series, in: E. A. G. Robinson (ed.), Problems in Economic Development, chapter 0, pages 311-319, Palgrave Macmillan.
    5. Richard B. Freeman & Wayne B. Gray & Casey Ichniowski, 1981. "Low-Cost Student Labor: The Use and Effects of the Subminimum Wage Provisions for Full-time Students," NBER Working Papers 0765, National Bureau of Economic Research, Inc.
    6. David Card, 1992. "Using Regional Variation in Wages to Measure the Effects of the Federal Minimum Wage," Working Papers 680, Princeton University, Department of Economics, Industrial Relations Section..
    7. Lawrence F. Katz & Alan B. Krueger, 1992. "The Effect of the Minimum Wage on the Fast-Food Industry," ILR Review, Cornell University, ILR School, vol. 46(1), pages 6-21, October.
    8. repec:fth:prinin:300 is not listed on IDEAS
    9. Lawrence F. Katz & Alan B. Krueger, 1991. "The Effect of the New Minimum Wage Law in a Low-Wage Labor Market," Working Papers 660, Princeton University, Department of Economics, Industrial Relations Section..
    10. repec:fth:prinin:298 is not listed on IDEAS
    11. Stephen Machin & Alan Manning, 1994. "The Effects of Minimum Wages on Wage Dispersion and Employment: Evidence from the U.K. Wages Councils," ILR Review, Cornell University, ILR School, vol. 47(2), pages 319-329, January.
    12. Lawrence Katz & Alan Krueger, 1992. "The Effect of the Minimum Wage on the Fast Food Industry," Working Papers 678, Princeton University, Department of Economics, Industrial Relations Section..
    13. Stephen Machin & Alan Manning, 1992. "Minimum Wages," CEP Discussion Papers dp0080, Centre for Economic Performance, LSE.
    14. Santiago, Carlos E, 1989. "The Dynamics of Minimum Wage Policy in Economic Development: A Multiple Time-Series Approach," Economic Development and Cultural Change, University of Chicago Press, vol. 38(1), pages 1-30, October.
    15. Brown, Charles, 1988. "Minimum Wage Laws: Are They Overrated?," Journal of Economic Perspectives, American Economic Association, vol. 2(3), pages 133-145, Summer.
    16. Alida Castillo-Freeman & Richard B. Freeman, 1992. "When the Minimum Wage Really Bites: The Effect of the U.S.-Level Minimum on Puerto Rico," NBER Chapters, in: Immigration and the Work Force: Economic Consequences for the United States and Source Areas, pages 177-212, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. David Neumark & William Wascher, 1995. "The Effects of Minimum Wages on Teenage Employment and Enrollment: Evidence from Matched CPS Surveys," NBER Working Papers 5092, National Bureau of Economic Research, Inc.
    2. Gindling, T. H. & Terrell, Katherine, 2004. "The Effects of Multiple Minimum Wages Throughout the Labor Market," IZA Discussion Papers 1159, Institute of Labor Economics (IZA).
    3. Asep Suryahadi, & Wenefrida Widyanti & Daniel Perwira & Sudarno Sumarto, 2001. "The Impact of Minimum Wage Policy on Wages and Employment in Developing Countries: The Case of Indonesia," Economics Study Area Working Papers 38, East-West Center, Economics Study Area.
    4. Gindling, T.H. & Terrell, Katherine, 2007. "The effects of multiple minimum wages throughout the labor market: The case of Costa Rica," Labour Economics, Elsevier, vol. 14(3), pages 485-511, June.
    5. Maria Enchautegui & Richard B. Freeman, 2005. "Why Don't More Puerto Rican Men Work? The Rich Uncle (Sam) Hypothesis," NBER Working Papers 11751, National Bureau of Economic Research, Inc.
    6. Dessing, Maryke, 2004. "Implications for minimum-wage policies of an S-shaped labor-supply curve," Journal of Economic Behavior & Organization, Elsevier, vol. 53(4), pages 543-568, April.
    7. Omberg Robert Tucker, 2021. "Puerto Rico's minimum wage: Revisiting a price floor with bite," IZA Journal of Labor Policy, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 11(1), pages 1-25, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. David Neumark & William Wascher, 1995. "The Effects of Minimum Wages on Teenage Employment and Enrollment: Evidence from Matched CPS Surveys," NBER Working Papers 5092, National Bureau of Economic Research, Inc.
    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. Rebitzer, James B. & Taylor, Lowell J., 1995. "The consequences of minimum wage laws Some new theoretical ideas," Journal of Public Economics, Elsevier, vol. 56(2), pages 245-255, February.
    4. Armin Falk & Ernst Fehr & Christian Zehnder, "undated". "The Behavioral Effects of Minimum Wages," IEW - Working Papers 247, Institute for Empirical Research in Economics - University of Zurich.
    5. Daniel B. Klein & Stewart Dompe, 2007. "Reasons for Supporting the Minimum Wage: Asking Signatories of the "Raise the Minimum Wage" Statement," Econ Journal Watch, Econ Journal Watch, vol. 4(1), pages 125-167, January.
    6. M. Kemal Biçerli & Merve Kocaman, 2019. "The Impact Of Minimum Wage On Unemployment, Prices, And Growth: A Multivariate Analysis For Turkey," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 64(221), pages 65-84, April – J.
    7. Haroon Bhorat & Tara Caetano & Benjamin Jourdan & Ravi Kanbur & Christopher Rooney & Benjamin Stanwix & Ingrid Woolard, 2016. "Investigating the Feasibility of a National Minimum Wage for South Africa," Working Papers 201601, University of Cape Town, Development Policy Research Unit.
    8. Dickens, Richard & Machin, Stephen & Manning, Alan, 1998. "Estimating the effect of minimum wages on employment from the distribution of wages: A critical view," Labour Economics, Elsevier, vol. 5(2), pages 109-134, June.
    9. Zsófia L. Bárány, 2016. "The Minimum Wage and Inequality: The Effects of Education and Technology," Journal of Labor Economics, University of Chicago Press, vol. 34(1), pages 237-274.
    10. János Köllö, 2010. "Hungary: The Consequences of Doubling the Minimum Wage," Chapters, in: Daniel Vaughan-Whitehead (ed.), The Minimum Wage Revisited in the Enlarged EU, chapter 8, Edward Elgar Publishing.
    11. repec:hal:spmain:info:hdl:2441/4jgjdlef848r49dq2dv8go26r7 is not listed on IDEAS
    12. Sara Lemos, 2004. "A Menu of Minimum Wage Variables for Evaluating Wages and Employment Effects: Evidence from Brazil," Discussion Papers in Economics 04/3, Division of Economics, School of Business, University of Leicester.
    13. Zavodny, Madeline, 2000. "The effect of the minimum wage on employment and hours," Labour Economics, Elsevier, vol. 7(6), pages 729-750, November.
    14. repec:eee:labchp:v:3:y:1999:i:pb:p:2101-2163 is not listed on IDEAS
    15. Bhaskar, V & To, Ted, 1999. "Minimum Wages for Ronald McDonald Monopsonies: A Theory of Monopsonistic Competition," Economic Journal, Royal Economic Society, vol. 109(455), pages 190-203, April.
    16. Holmlund, Bertil, 2014. "What do labor market institutions do?," Labour Economics, Elsevier, vol. 30(C), pages 62-69.
    17. Otterby, Dawn & Crawley, Andrew & Gabe, Todd, 2023. "Effects of the Minimum Wage on U.S. County Labor Markets," MPRA Paper 116162, University Library of Munich, Germany.
    18. Tor Eriksson & Mariola Pytlikova, 2004. "Firm‐level Consequences of Large Minimum‐wage Increases in the Czech and Slovak Republics," LABOUR, CEIS, vol. 18(1), pages 75-103, March.
    19. Dessing, Maryke, 2004. "Implications for minimum-wage policies of an S-shaped labor-supply curve," Journal of Economic Behavior & Organization, Elsevier, vol. 53(4), pages 543-568, April.
    20. Katerina Sherstyuka & Dolgorsuren Dorjb & Gerard Russo, 2014. "Health Insurance and the Labor Market with Wage Rigidities: Insights from a Laboratory Experiment," Working Papers 201427, University of Hawaii at Manoa, Department of Economics.
    21. Marlies Piek & Dieter von Fintel, 2020. "Sectoral minimum wages in South Africa: Disemployment by firm size and trade exposure," Development Southern Africa, Taylor & Francis Journals, vol. 37(3), pages 462-482, May.
    22. Deltas, George, 2007. "Can a minimum wage increase employment and reduce prices in a neoclassical perfect information economy?," Journal of Mathematical Economics, Elsevier, vol. 43(6), pages 657-674, August.

    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:4757. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.