Is politics the missing piece of the minimum wage puzzle?

Jesse Wursten

No 637468, Working Papers of ECOOM - Centre for Research and Development Monitoring from KU Leuven, Faculty of Economics and Business (FEB), ECOOM - Centre for Research and Development Monitoring

Abstract: The effect of minimum wages on employment in the US is highly disputed. We show that the differences in the literature can be explained by heterogeneous shifts in political ideology across states. We add a control for political ideology to US county-level panel studies based on 1990-2013 employment and earnings data from the Quarterly Census of Employment and Wages (QCEW). The results suggest minimum wages increase earnings in affected sectors without reducing employment. Unlike existing estimates, these new results remain consistent across specifications, even when we instrument the political ideology variable using evolving cultural values or campaign contributions. The methodology used can be extended to analyses of other state level policies.

Keywords: minimum wage; labour policy; political ideology; employment; labour markets (search for similar items in EconPapers)
Pages: 37
Date: 2019-05-14
New Economics Papers: this item is included in nep-ure
Note: paper number MSI_1905
References: Add references at CitEc
Citations:

Published in FEB Research Report MSI_1905

Downloads: (external link)
https://lirias.kuleuven.be/retrieve/539141 Published version (application/pdf)

Related works:
Working Paper: Is politics the missing piece of the minimum wage puzzle? (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ete:ecoomp:637468

Access Statistics for this paper

More papers in Working Papers of ECOOM - Centre for Research and Development Monitoring from KU Leuven, Faculty of Economics and Business (FEB), ECOOM - Centre for Research and Development Monitoring
Bibliographic data for series maintained by library EBIB ().