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The Wage and Employment Dynamics of Minimum Wage Workers

  • William E. Even

    (Miami University)

  • David A. Macpherson

    (Florida State University)

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.

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Paper provided by EconWPA in its series Labor and Demography with number 0404007.

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Length: 37 pages
Date of creation: 22 Apr 2004
Date of revision:
Handle: RePEc:wpa:wuwpla:0404007
Note: Type of Document - pdf; pages: 37
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  1. Adam J. Grossberg & Paul Sicilian, 1999. "Minimum Wages, On-the-Job Training, and Wage Growth," Southern Economic Journal, Southern Economic Association, vol. 65(3), pages 539-556, January.
  2. 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.
  3. Daron Acemoglu & Jörn-Steffen Pischke, 2002. "Minimum Wages and On-the-Job Training," CEP Discussion Papers dp0527, Centre for Economic Performance, LSE.
  4. Hashimoto, Masanori, 1982. "Minimum Wage Effects on Training on the Job," American Economic Review, American Economic Association, vol. 72(5), pages 1070-87, December.
  5. Loprest, Pamela J, 1992. "Gender Differences in Wage Growth and Job Mobility," American Economic Review, American Economic Association, vol. 82(2), pages 526-32, May.
  6. Robert H. Topel, 1990. "Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority," NBER Working Papers 3294, National Bureau of Economic Research, Inc.
  7. Joseph G. Altonji & Robert A. Shakotko, 1985. "Do Wages Rise With Job Seniority?," NBER Working Papers 1616, National Bureau of Economic Research, Inc.
  8. 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.
  9. 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.
  10. 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 426-71, July.
  11. Peter Gottschalk, 2001. "Wage Mobility within and between Jobs," LoWER Working Papers wp1, AIAS, Amsterdam Institute for Advanced Labour Studies.
  12. 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 331-44, October.
  13. Ralph E. Smith & Bruce Vavrichek, 1992. "The wage mobility of minimum wage workers," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 46(1), pages 82-88, October.
  14. 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.
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