Estimating the earnings and employment effects of the minimum wage through differences in exposure across US counties

Jesse Wursten

No 654187, Working Papers of Department of Management, Strategy and Innovation, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Management, Strategy and Innovation, Leuven

Abstract: We assess the impact of minimum wage changes on employment and earnings by exploiting wage variation within US states. We split counties into low, medium and high vulnerability groups. Our method is a hybrid of di erence in di erences and event study mod- els, allowing us to pool all minimum wage events between 1990- 2017. Applied to the food services sector, we find that earnings effects increase strongly in vulnerability, whereas differences in em- ployment effects are small and fragile. The earnings results persist when evaluating other low wage sectors or teenagers, whereas any evidence of disemployment effects disappears.

Keywords: minimum wage; labour policy; employment elasticity; labour markets; local projection; long differences; wage heterogeneity (search for similar items in EconPapers)
Pages: 88
Date: 2020-05-06
Note: paper number MSI_2006
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Published in FEB Research Report MSI_2006, pages 1-88

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Working Paper: Estimating the earnings and employment effects of the minimum wage through differences in exposure across US counties (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:ete:msiper:654187

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