The impact of minimum wages on adult female employment and labor force participation

Teresa Marie Long

ISU General Staff Papers from Iowa State University, Department of Economics

Abstract: This study attempts to theoretically and empirically examine if minimum wage legislation alters the employment and labor force participation of women age twenty and older. The theoretical and empirical analyses are based on a combination of the labor force participation and minimum wage literatures;The previous minimum wage literature is not consistent in the empirical measurement of the impact on adult women. This study attempts to reconcile the empirical results of the Mincer (2) and Gramlich (1) minimum wage studies by re-estimating their quarterly time series models. To extend this analysis, the model constructed for this study, while regressing the minimum wage on the aggregate employment, full time and part time employment, and labor force participation of adult women, controls for the unemployment rate and the presence of children, as do Mincer (2) and Gramlich (1), and also controls for female earnings, the husband's income and welfare supplements. To test for a discriminant impact, the dependent labor force variable is also categorized by race, marital status, and marital status and age, and the dependent employment variable is categorized by race, full time and part time and marital status. Due to data limitations on the dependent variables by marital status and age, these equations use annual data. All other models use quarterly data;The re-estimation of the Mincer (2) and Gramlich (1) models suggest that minimum wage legislation does not adversely affect the aggregate employment and labor force participation of adult women but that it does augment the part time employment of these women. The extended time series analysis tends to support this conclusion and also suggests that the labor force participation of women age 20 to 24, especially single women, tends to be adversely affected by the legislation. Older women, regardless of marital status, do not appear to be adversely affected;(1) Gramlich, Edward. "The Impact of Minimum Wages on Other Wages, Employment, and Family Income." Brookings Papers on Economic Activity (1976):409-451;(2) Mincer, Jacob. "Unemployment Effects of Minimum Wages." Journal of Political Economy 84 (August 1976):s87-s104.

Date: 1980-01-01
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