Beyond Employment: Minimum Wage Effects on Hours Worked

Hikaru Ota ()
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Hikaru Ota: Friedrich Schiller University Jena

No 2026-012, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: This study estimates the effect of minimum wage increases on low-wage employment and working hours using an event study analysis based on 138 state-level minimum wage changes in the United States. The results show that employment declines in wage bins below the new minimum wage are largely offset by increases in employment at and above it, yielding a near-zero net employment effect. Applying the same wage bin framework to total usual weekly working hours, the analysis finds no significant reduction in total working hours. However, hours worked per worker decrease significantly in the wage bin at the new minimum wage. This pattern may reflect firms adjusting along the intensive margin, but it may also arise from changes in the composition of workers within that wage bin; the analysis cannot distinguish between these explanations. Nevertheless, the findings demonstrate that stable employment levels can mask underlying changes in hours worked.

Keywords: Minimum wage; employment; labor demand; hours worked; low-wage employment (search for similar items in EconPapers)
JEL-codes: J22 J23 J31 J38 (search for similar items in EconPapers)
Date: 2026-10-06
New Economics Papers: this item is included in nep-inv and nep-lma
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Persistent link: https://EconPapers.repec.org/RePEc:jrp:jrpwrp:2026-012

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