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Effects of the Minimum Wage on Employment Dynamics

Effects of the Minimum Wage on Employment Dynamics <p>The voluminous literature on minimum wages offers little consensus on the extent to which a wage floor impacts employment. We argue that the minimum wage will impact employment over time through changes in growth rather than an immediate drop in relative employment levels. We show that commonly used specifications in this literature, especially those that include state-specific time trends, will not accurately capture these effects. Using three separate state panels of administrative employment data, we find that the minimum wage reduces job growth over a period of several years. This finding is supported using several empirical specifications.</p> http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Human Resources University of Wisconsin Press

Effects of the Minimum Wage on Employment Dynamics

Journal of Human Resources , Volume 51 (2) – Apr 21, 2016

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Publisher
University of Wisconsin Press
Copyright
©by the Board of Regents of the University of Wisconsin System
ISSN
1548-8004

Abstract

<p>The voluminous literature on minimum wages offers little consensus on the extent to which a wage floor impacts employment. We argue that the minimum wage will impact employment over time through changes in growth rather than an immediate drop in relative employment levels. We show that commonly used specifications in this literature, especially those that include state-specific time trends, will not accurately capture these effects. Using three separate state panels of administrative employment data, we find that the minimum wage reduces job growth over a period of several years. This finding is supported using several empirical specifications.</p>

Journal

Journal of Human ResourcesUniversity of Wisconsin Press

Published: Apr 21, 2016

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