New Estimates of the Effects of Minimum Wages in the U.S. Retail Trade Sector

John Addison (), McKinley L. Blackburn () and Chad D. Cotti ()
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Chad D. Cotti: University of Wisconsin, Oshkosh

No 3597, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: This paper examines the impact of minimum wages on earnings and employment in selected branches of the retail-trade sector, 1990-2005, using county-level data on employment and a panel regression framework that allows for county-specific trends in sectoral outcomes. We focus on particular subsectors within retail trade that are identified as particularly low-wage. We find little evidence of disemployment effects once we allow for geographic-specific trends. Rather, in many sectors the evidence suggests modest (but robust) positive employment effects. One explanation we consider for these ‘perverse’ effects is that minimum wages may have significant influences on product demand shifts.

Keywords: border county analysis; spatial trends; county-level data; wages and employment; minimum wages; unions; right-to-work states (search for similar items in EconPapers)
JEL-codes: J23 J38 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ifn, nep-lab and nep-ltv
Date: 2008-07
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Forthcoming in: Labour Economics

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