Effects of the minimum wage on the nonprofit sector

Jonathan Meer and Hedieh Tajali

Oxford Economic Papers, 2023, vol. 75, issue 4, 1012-1032

Abstract: The nonprofit sector’s ability to absorb increases in labor costs differs from the private sector in a number of ways. We analyse how nonprofits are affected by changes in the minimum wage utilizing data from the Bureau of Labor Statistics and the Internal Revenue Service, linked to state minimum wages. We examine changes in reported employment and volunteering, as well as other financial statements such as revenues and expenses. The results from both datasets show a negative impact on employment for states with large statutory minimum wage increases. We observe some evidence for a reduction in the number of nonprofit establishments, fundraising expenses, and revenues from contributions.

JEL-codes: D64 I22 L31 (search for similar items in EconPapers)
Date: 2023
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Working Paper: Effects of the Minimum Wage on the Nonprofit Sector (2023)
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