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Effects of the Minimum Wage on Employment Dynamics

Jonathan Meer and Jeremy West

No 15-233, Upjohn Working Papers from W.E. Upjohn Institute for Employment Research

Abstract: The voluminous literature on minimum wages offers little consensus on the extent to which a wage floor impacts employment. We argue that the minimum wage will impact employment over time, through changes in growth rather than an immediate drop in relative employment levels. We conduct simulations showing that commonly-used specifications in this literature, especially those that include state-specific time trends, will not accurately capture these effects. Using three separate state panels of administrative employment data, we find that the minimum wage reduces job growth over a period of several years. These effects are most pronounced for younger workers and in industries with a higher proportion of low-wage workers.

Keywords: Minimum wage; employment growth; administrative data; low-wage workers (search for similar items in EconPapers)
JEL-codes: J31 J38 J63 (search for similar items in EconPapers)
Date: 2015-01
References: Add references at CitEc
Citations: View citations in EconPapers (39)

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Related works:
Journal Article: Effects of the Minimum Wage on Employment Dynamics (2016) Downloads
Working Paper: Effects of the Minimum Wage on Employment Dynamics (2016) Downloads
Working Paper: Effects of the Minimum Wage on Employment Dynamics (2013) Downloads
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