Distribution Effects of Local Minimum Wage Hikes: A Spatial Job Search Approach

Weilong Zhang

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: This paper develops and estimates a spatial general equilibrium job search model to study the effects of local and universal (federal) minimum wage policies. In the model, firms post vacancies in multiple locations. Workers, who are heterogeneous in terms of location and education types, engage in random search and can migrate or commute in response to job offers. I estimate the model by combining multiple databases including the American Community Survey (ACS) and Quarterly Workforce Indicators (QWI). The estimated model is used to analyze how minimum wage policies affect employment, wages, job postings, vacancies, migration/ commuting, and welfare. Empirical results show that minimum wage increases in local county lead to an exit of low type (education

Keywords: spatial equilibrium; local minimum wage policy; labor relocation (search for similar items in EconPapers)
JEL-codes: J61 J63 J64 J68 R12 R13 (search for similar items in EconPapers)
Date: 2018-12-03
New Economics Papers: this item is included in nep-geo, nep-lab and nep-ure
Note: wz301
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:1889

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