Minimum Wage Shocks, Employment Flows and Labor Market Frictions

Arindrajit Dube, T. William Lester and Michael Reich

Institute for Research on Labor and Employment, Working Paper Series from Institute of Industrial Relations, UC Berkeley

Abstract: We provide the first estimates of the effects of minimum wages on employment flows in the U.S. labor market, identifying the impact by using policy discontinuities at state borders. We find that minimum wages have sizeable negative effect on employment flows but not stocks. Separations and accessions fall among affected workers, especially those with low tenure. We do not find changes in the duration of non-employment for separations or hires. This evidence is consistent with search models with endogenous separations, but explanations focused only on quits or only on layoffs are unlikely to explain the full complement of findings.

Keywords: Social and Behavioral Sciences; Minimum Wage; Labor Market Flows; Job Turnover; Search Frictions; Monopsony; Unemployment (search for similar items in EconPapers)
Date: 2013-07-20
New Economics Papers: this item is included in nep-lab and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Working Paper: Minimum Wage Shocks, Employment Flows and Labor Market Frictions (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:cdl:indrel:qt27z0006g

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