IDEAS home Printed from https://ideas.repec.org/p/wpa/wuwpla/0404007.html
   My bibliography  Save this paper

The Wage and Employment Dynamics of Minimum Wage Workers

Author

Listed:
  • William E. Even

    (Miami University)

  • David A. Macpherson

    (Florida State University)

Abstract

This study uses 20 years of short panel data sets on minimum wage workers to examine the wage and employment dynamics of minimum wage workers. Compared to workers earning above the minimum wage, minimum wage workers differ substantially in several ways. First, minimum wage workers are much more likely to be new entrants and much more likely to exit the labor market. Second, changes in industry and occupation and access to job training are particularly important to improving the wages of minimum wage workers. Finally, we find evidence that many minimum wage workers are earning less than their potential wage temporarily because of other non-work circumstances that make higher paying jobs less attractive.

Suggested Citation

  • William E. Even & David A. Macpherson, 2004. "The Wage and Employment Dynamics of Minimum Wage Workers," Labor and Demography 0404007, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpla:0404007
    Note: Type of Document - pdf; pages: 37
    as

    Download full text from publisher

    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/lab/papers/0404/0404007.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. James J. Heckman, 1976. "The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 475-492, National Bureau of Economic Research, Inc.
    2. Daron Acemoglu & Jörn-Steffen Pischke, 2003. "Minimum Wages And On-The-Job Training," Research in Labor Economics, in: Worker Well-Being and Public Policy, pages 159-202, Emerald Group Publishing Limited.
    3. Adam J. Grossberg & Paul Sicilian, 1999. "Minimum Wages, On-the-Job Training, and Wage Growth," Southern Economic Journal, John Wiley & Sons, vol. 65(3), pages 539-556, January.
    4. Macpherson, David A & Hirsch, Barry T, 1995. "Wages and Gender Composition: Why Do Women's Jobs Pay Less?," Journal of Labor Economics, University of Chicago Press, vol. 13(3), pages 426-471, July.
    5. Joseph G. Altonji & Robert A. Shakotko, 1987. "Do Wages Rise with Job Seniority?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 54(3), pages 437-459.
    6. Neumark, David & Wascher, William, 2001. "Minimum Wages and Training Revisited," Journal of Labor Economics, University of Chicago Press, vol. 19(3), pages 563-595, July.
    7. Francis Vella, 1998. "Estimating Models with Sample Selection Bias: A Survey," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 127-169.
    8. Peter Gottschalk, 2000. "Wage Mobility within and between Jobs," Boston College Working Papers in Economics 486, Boston College Department of Economics, revised 03 Apr 2001.
    9. Ralph E. Smith & Bruce Vavrichek, 1992. "The Wage Mobility of Minimum Wage Workers," ILR Review, Cornell University, ILR School, vol. 46(1), pages 82-88, October.
    10. James Long, 1999. "Updated estimates of the wage mobility of minimum wage workers," Journal of Labor Research, Springer, vol. 20(4), pages 493-503, December.
    11. Mellow, Wesley & Sider, Hal, 1983. "Accuracy of Response in Labor Market Surveys: Evidence and Implications," Journal of Labor Economics, University of Chicago Press, vol. 1(4), pages 331-344, October.
    12. Peracchi, Franco & Welch, Finis, 1995. "How representative are matched cross-sections? Evidence from the Current Population Survey," Journal of Econometrics, Elsevier, vol. 68(1), pages 153-179, July.
    13. Topel, Robert H, 1991. "Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority," Journal of Political Economy, University of Chicago Press, vol. 99(1), pages 145-176, February.
    14. Peter Gottschalk, 2001. "Wage Mobility within and between Jobs," LoWER Working Papers wp1, AIAS, Amsterdam Institute for Advanced Labour Studies.
    15. Hashimoto, Masanori, 1982. "Minimum Wage Effects on Training on the Job," American Economic Review, American Economic Association, vol. 72(5), pages 1070-1087, December.
    16. Loprest, Pamela J, 1992. "Gender Differences in Wage Growth and Job Mobility," American Economic Review, American Economic Association, vol. 82(2), pages 526-532, May.
    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. Jonathan Meer & Jeremy West, 2016. "Effects of the Minimum Wage on Employment Dynamics," Journal of Human Resources, University of Wisconsin Press, vol. 51(2), pages 500-522.
    2. Nicolás Francisco Abbate & Bruno Jimnez, 2022. "Do Minimum Wage Hikes Lead to Employment Destruction? Evidence from a Regression Discontinuity Design in Argentina," Asociación Argentina de Economía Política: Working Papers 4533, Asociación Argentina de Economía Política.
    3. Jeffrey Clemens & Michael R. Strain, 2023. "How important are minimum wage increases in increasing the wages of minimum wage workers?," Contemporary Economic Policy, Western Economic Association International, vol. 41(4), pages 594-612, October.
    4. Carolyn J. Heinrich & Peter R. Mueser & Kenneth R. Troske, 2009. "The Role of Temporary Help Employment in Low-Wage Worker Advancement," NBER Chapters, in: Studies of Labor Market Intermediation, pages 399-436, National Bureau of Economic Research, Inc.
    5. 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.

    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. Dan A. Black & Lars Skipper & Jeffrey A. Smith & Jeffrey Andrew Smith, 2023. "Firm Training," CESifo Working Paper Series 10268, CESifo.
    2. Michele Campolieti & Morley Gunderson & Byron Lee, 2012. "The (Non) Impact of Minimum Wages on Poverty: Regression and Simulation Evidence for Canada," Journal of Labor Research, Springer, vol. 33(3), pages 287-302, September.
    3. Pfeifer, Christian & Janssen, Simon & Yang, Philip & Backes-Gellner, Uschi, 2010. "Training Participation of an Aging Workforce in an Internal Labor Market," Hannover Economic Papers (HEP) dp-447, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    4. David Neumark & Olena Nizalova, 2007. "Minimum Wage Effects in the Longer Run," Journal of Human Resources, University of Wisconsin Press, vol. 42(2).
    5. Daron Acemoglu & Jorn-Steffen Pischke, 1999. "The Structure of Wages and Investment in General Training," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 539-572, June.
    6. Wiji Arulampalam & Alison L. Booth & Mark L. Bryan, 2004. "Training and the new minimum wage," Economic Journal, Royal Economic Society, vol. 114(494), pages 87-94, March.
    7. Eguchi, Kyota, 2004. "Minimum wages enhancing trainers’ incentives," ISER Working Paper Series 2004-18, Institute for Social and Economic Research.
    8. Marcin Wroniewicz & Paweł Strawiński, 2013. "Badanie zwrotu z mobilności zawodowej w Polsce," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 35.
    9. David Fairris & Roberto Pedace, 2004. "The Impact of Minimum Wages on Job Training: An Empirical Exploration with Establishment Data," Southern Economic Journal, John Wiley & Sons, vol. 70(3), pages 566-583, January.
    10. L. Bryan, Mark & L. Booth, Alison & Arulampalam, Wiji, 2003. "Work-related training and the new National Minimum Wage in Britain -ISER Working Paper-," ISER Working Paper Series 2003-05, Institute for Social and Economic Research.
    11. Christian Dustmann & Uta Schönberg, 2009. "Training and Union Wages," The Review of Economics and Statistics, MIT Press, vol. 91(2), pages 363-376, May.
    12. Cardoso, Ana Rute, 2009. "Long-Term Impact of Youth Minimum Wages: Evidence from Two Decades of Individual Longitudinal Data," IZA Discussion Papers 4236, Institute of Labor Economics (IZA).
    13. Panigo, Demian & Naticchioni, Paolo, 2004. "Employment protection, job-tenure and short term mobility wage gains," CEPREMAP Working Papers (Couverture Orange) 0402, CEPREMAP.
    14. repec:eee:labchp:v:3:y:1999:i:pc:p:3143-3259 is not listed on IDEAS
    15. Kyota Eguchi, 2010. "Minimum Wages and Trainers' Dilemma," LABOUR, CEIS, vol. 24(2), pages 128-138, June.
    16. VILHUBERT, Lars, 1999. "Wage Flexibility and Contract Structure in Germany," Cahiers de recherche 9905, Universite de Montreal, Departement de sciences economiques.
    17. 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.
    18. Daron Acemoglu & Jörn-Steffen Pischke, 2003. "Minimum Wages And On-The-Job Training," Research in Labor Economics, in: Worker Well-Being and Public Policy, pages 159-202, Emerald Group Publishing Limited.
    19. Gregory, Terry & Zierahn, Ulrich, 2022. "When the minimum wage really bites hard: The negative spillover effect on high-skilled workers," Journal of Public Economics, Elsevier, vol. 206(C).
    20. Katalin Bodnár & Ludmila Fadejeva & Stefania Iordache & Liina Malk & Desislava Paskaleva & Jurga Pesliakaitė & Nataša Todorović Jemec & Peter Tóth & Robert Wyszyński, 2018. "How do firms adjust to rises in the minimum wage? Survey evidence from Central and Eastern Europe," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-30, December.
    21. John Schmitt & David Rosnick, 2011. "The Wage and Employment Impact of Minimum-Wage Laws in Three Cities," CEPR Reports and Issue Briefs 2011-07, Center for Economic and Policy Research (CEPR).

    More about this item

    JEL classification:

    • J - Labor and Demographic Economics

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:wpa:wuwpla:0404007. 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: EconWPA (email available below). General contact details of provider: https://econwpa.ub.uni-muenchen.de .

    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.