I had another dream, I had another life
According to a new job market paper, yes: Minimum wage laws in the US typically institute a schedule of increases rather than one-off hikes. After the corresponding legislation is passed, the minimum wage increases in steps over several years to the final value set in the law. Especially the later steps are known long in … Read more
A new working paper provides some interesting results about the interplay between immigration and minimum wage laws: Our first empirical strategy exploits the non-linearity of the minimum wage across U.S. States to investigate the role played by the minimum wage in shaping the impact of immigration on the wages and employment of competing native workers. … Read more
A couple years ago, I wrote, Other studies show that an increased minimum wage causes firms to incrementally move toward automation. Now, this too could be seen as a trade-off: automation and technological progress tend to make processes more efficient and therefore increase productivity (and eventually wages), raising living standards for consumers (which include the poor). Nonetheless, the point is that … Read more
Ready for the second minimum wage paper in a row today? A new working paper looks at the Danish experience, where the minimum wage increases drastically when individuals turn 18 years old. So what happens when individuals become adults? “Danish minimum wages cause an increase in average wages of 40 percent when workers reach age … Read more
A brand new NBER paper finds (quite unsurprisingly, despite what The Washington Post says) that the Seattle Minimum Wage Ordinance caused hours worked by low-skilled workers (i.e., those earning under $19 per hour) to fall by 9.4% during the three quarters when the minimum wage was $13 per hour, resulting in a loss of 3.5 … Read more
Do minimum wage increases cause low-wage workers to commute out-of-state more? A brand new paper in Regional Science and Urban Economics answers in the affirmative. According to the Cato Institute’s blog, [Terra McKinnish] seeks to exploit the variation in minimum wage rates between states and the compressing effect of the 2009 federal minimum wage increase to analyze … Read more
A brand new working paper looks at 2 million hourly wage workers from over 300 companies in order to determine the effects of minimum wage changes. As reported, For the first time, a group of researchers at Washington University in St. Louis used a big-data approach to determine the effects of minimum-wage changes on business. Two … Read more
The New York Times has a recent article discussing new research on the minimum wage presented at the annual meeting of the American Economic Association: John Horton of New York University conducted an experiment on an online platform where employers post discrete jobs — including customer service support, data entry, and graphic design — and … Read more
Over at the World Bank’s Development Impact blog, doctoral candidate Andrés Ham looks at the effects of minimum wage hikes in developing countries. “Minimum wages in developing countries tend to be set higher, are less likely to be rigorously enforced, and labor markets are often segmented into formal and informal sectors with minimum wage policy only … Read more
GMU economist Don Boudreaux wrote an open letter to Bloomberg‘s Barry Ritholtz on his blog Cafe Hayek. It was in response to Ritholtz’s recent article on the minimum wage, which claims that “modest increases in minimum wages don’t lead to job losses.” This, in Ritholtz’s view, is “well-established” in the literature. Ritholtz certainly has studies that … Read more