The Minimum Wage and Inequality Between Groups

Francine Blau, Isaac Cohen, Matthew L. Comey, Lawrence Kahn and Nikolai Boboshko

No 31725, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We use wage data from the Current Population Survey Merged Outgoing Rotation Group (CPS MORG) to study the effect of state and federal minimum wage policies on gender, race, and ethnic inequality throughout the wage distribution, focusing on lower-tail inequality between men and women, Blacks and Whites, and Hispanics and Whites. We use estimates from three empirical strategies — two reduced-form, one structural — to provide counterfactual simulations of between-group inequality over four key “epochs” of minimum wage policy changes since 1979. Declines in the real minimum wage during the 1980s slowed progress in narrowing between-group inequality during that period. Fairly muted shifts in national and state policies from 1989 to 1998 and 1998 to 2007 meant that the minimum wage was less important over those time spans. Since 2007, several states have opted for steep minimum wage hikes, which we find have especially improved Hispanics’ relative wages, both because they continue to earn low wages and because they reside disproportionately in those states. Finally, we make predictions about the effect of raising the federal minimum wage to $12. We find that a change of this magnitude would reduce existing between-group wage gaps below the 15th percentile by 25-50% and would therefore have an economically important impact on gender, racial, and ethnic inequality in the present day.

JEL-codes: J15 J16 J31 J38 (search for similar items in EconPapers)
Date: 2023-09
New Economics Papers: this item is included in nep-ger, nep-lma and nep-ltv
Note: LS
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.nber.org/papers/w31725.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:31725

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w31725
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().