The Effect of Minimum Wages on Low-Wage Jobs
Doruk Cengiz, Arindrajit Dube, Attila Lindner, Ben Zipperer
Summary
The authors estimate the employment effects of US state-level minimum wage increases by examining changes in the entire frequency distribution of hourly wages around each policy change. Using a bunching estimator across 138 prominent state-level increases, they count the number of jobs lost below the new minimum and the number gained at or above it. They find the number of jobs paying below the new minimum fell while jobs at or above it rose by roughly the same amount, implying minimal disemployment effects.
Key findings
- The number of jobs below the new minimum wage fell while jobs near and just above it rose by a similar magnitude, leaving overall low-wage employment essentially unchanged.
- The implied employment elasticity with respect to the wage is close to zero (statistically indistinguishable from zero).
- Wage gains from the increases were not offset by job losses, even in the years following the policy changes.
Subjects & keywords
Cite this paper
Doruk Cengiz, Arindrajit Dube, Attila Lindner, & Ben Zipperer (2019). The Effect of Minimum Wages on Low-Wage Jobs. The Quarterly Journal of Economics. https://doi.org/10.1093/qje/qjz014
@article{cengiz2019effect,
author = {Doruk Cengiz and Arindrajit Dube and Attila Lindner and Ben Zipperer},
title = {The Effect of Minimum Wages on Low-Wage Jobs},
journal = {The Quarterly Journal of Economics},
year = {2019},
doi = {10.1093/qje/qjz014},
url = {https://doi.org/10.1093/qje/qjz014}
}