The Minimum Wage and the Great Recession: Evidence from the Current Population Survey

Jeffrey Clemens

No 21830, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: I analyze recent federal minimum wage increases using the Current Population Survey. The relevant minimum wage increases were differentially binding across states, generating natural comparison groups. I first estimate a standard difference-in-differences model on samples restricted to relatively low-skilled individuals, as described by their ages and education levels. I also employ a triple-difference framework that utilizes continuous variation in the minimum wage's bite across skill groups. In both frameworks, estimates are robust to adopting a range of alternative strategies, including matching on the size of states' housing declines, to account for variation in the Great Recession's severity across states. My baseline estimate is that this period's full set of minimum wage increases reduced employment among individuals ages 16 to 30 with less than a high school education by 5.6 percentage points. This estimate accounts for 43 percent of the sustained, 13 percentage point decline in this skill group's employment rate and a 0.49 percentage point decline in employment across the full population ages 16 to 64.

JEL-codes: E24 J21 J31 J38 K31 (search for similar items in EconPapers)
Date: 2015-12
New Economics Papers: this item is included in nep-mac
Note: EFG LS PE
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Citations: View citations in EconPapers (19)

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