Minimum Wage Increases in a Soft U.S. Economy

John Addison, McKinley Blackburn () and Chad Cotti

No 273, Economics Series from Institute for Advanced Studies

Abstract: Do apparently large minimum wage increases in an environment of straightened economic circumstances produce clearer evidence of disemployment effects than is typically reported in the new economics of the minimum wage? The present paper augments the sparse literature covering the very latest increases in the U.S. minimum wage, using three different data sets and the principal estimation strategies for handling geographically-disparate trends. Despite the seemingly more favorable milieu for identifying displacement effects, and although our treatment calls into question one well-received estimation strategy, our preferred specification generally fails to support a finding of negative employment effects. That is to say, minimum-wage workers are apparently concentrated in sectors of the economy for which the labor demand response to statutory wage hikes is minimal. Popular concern with a “recessionary multiplier” thus seems overdone.

Keywords: Minimum wages; Disemployment; Earnings; Low-wage sectors; Geographically-disparate employment trends; Recession (search for similar items in EconPapers)
JEL-codes: J2 J3 J4 J8 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2011-09
New Economics Papers: this item is included in nep-hme, nep-lab and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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https://irihs.ihs.ac.at/id/eprint/2085 First version, 2011 (application/pdf)

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