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The contribution of the minimum wage to US wage inequality over three decades: a reassessment

David Autor (), Alan Manning () and Christopher Smith ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We reassess the effect of minimum wages on US earnings inequality using additional decades of data and an IV strategy that addresses potential biases in prior work. We find that the minimum wage reduces inequality in the lower tail of the wage distribution, though by substantially less than previous estimates, suggesting that rising lower-tail inequality after 1980 primarily reflects underlying wage structure changes rather than an unmasking of latent inequality. These wage effects extend to percentiles where the minimum is nominally non‐binding, implying spillovers. We are unable to reject that these spillovers are due to reporting artifacts, however.

JEL-codes: N0 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ltv
Date: 2016-01-01
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Published in American Economic Journal: Applied Economics, 1, January, 2016, 8(1), pp. 58-99. ISSN: 1945-7782

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Related works:
Journal Article: The Contribution of the Minimum Wage to US Wage Inequality over Three Decades: A Reassessment (2016) Downloads
Working Paper: The Contribution of the Minimum Wage to U.S. Wage Inequality over Three Decades: A Reassessment (2010) Downloads
Working Paper: The contribution of the minimum wage to U.S. wage inequality over three decades: a reassessment (2010) Downloads
Working Paper: The Contribution of the Minimum Wage to U.S. Wage Inequality over Three Decades: A Reassessment (2010) Downloads
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