Minimum Wage Effects throughout the Wage Distribution

Neumark, David; Schweitzer, Mark E.; Wascher, William

doi:10.3368/jhr.xxxix.2.425

Cited by 153 publications

(173 citation statements)

References 18 publications

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“…Similarly, the effect of the minimum wage is salient at the bottom of the wage distribution but becomes negligible above the bottom (Autor, Manning, and Smith 2016;Neumark, Schweitzer, and Wascher 2004) and the effect of working in finance is greater at the top than the rest of the wage distribution .…”

Section: Model Specificationmentioning

confidence: 99%

Growing Apart: The Changing Firm-Size Wage Premium and Its Inequality Consequences

Cobb

Lin

2017

Organization Science

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Wage inequality in the United States has risen dramatically over the past few decades, prompting scholars to develop a number of theoretical accounts for the upward trend. This study argues that large firms have been a prominent labor-market institution that mitigates inequality. By compensating their low-and middle-wage employees with a greater premium than their higher-wage counterparts, large U.S. firms reduced overall wage dispersion. Yet, broader changes to employment relations associated with the demise of internal labor markets and the emergence of alternative employment arrangements have undermined large firms' role as an equalizing institution. Using data from the Current Population Survey and the Survey of Income and Program Participation, we find that in 1989, although all private-sector workers benefited from a firm-size wage premium, the premium was significantly higher for individuals at the lower end and middle of the wage distribution compared to those at the higher end. Between 1989 and 2014, the average firm-size wage premium declined markedly. The decline, however, was exclusive to those at the lower end and middle of the wage distribution, while there was no change for those at the higher end. As such, the uneven declines in the premium across the wage spectrum could account for about 20% of rising wage inequality during this period, suggesting that firms are of great importance to the study of rising inequality.Keywords firm-size wage premium, inequality, internal labor market, employment relationship Disciplines Management Sciences and Quantitative MethodsThis journal article is available at ScholarlyCommons:

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Section: Model Specificationmentioning

confidence: 99%

Growing Apart: The Changing Firm-Size Wage Premium and Its Inequality Consequences

Cobb

Lin

2017

Organization Science

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“…First, a number of researchers have suggested that employers may not respond instantaneously to changes in the minimum wage and argue for the inclusion of lagged policy effects (Neumark, Schweitzer, & Wascher, 2004;Burkhauser, Couch, & Wittenburg, 2000a;Page, Spetz, & Millar, 2005;Baker, Benjamin, & Stranger, 1999;Campolieti, Gunderson, & Riddell, 2006). Thus, the specifications in Panel I of Table 6 include both contemporaneous and one-year lagged minimum wage variables.…”

Section: Sensitivity Testsmentioning

confidence: 99%

Minimum wages and the economic well‐being of single mothers

Sabia

2008

J Policy Anal Manage

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“…The author investigate the employment chances of roofers along the wage distribution by comparing roofers with counterfactual outcomes of plumbers in a control group design. The authors find deteriorating employment perspectives for upper-decile workers in the sector, arguing similar to Neumark et al (2004), that the scale effect resulting from higher overall labour costs outweighs the substitution effect. As an alternative explanation, the authors argue that the MW induced some capital-labour substitution, assuming that it did not change the relative demand for skilled and unskilled labour much.…”

Section: Literature On Minimum Wage Spilloversmentioning

confidence: 53%

“…However, as Neumark et al (2004) suggest, a MW may also deteriorate wages of the upper wage deciles. In particular, the authors estimate the MW effects along the entire wage distribution, distinguishing between short-and long term effects (i.e.…”

Section: Literature On Minimum Wage Spilloversmentioning

confidence: 99%

When the Minimum Wage Bites Back: Quantile Treatment Effects of a Sectoral Minimum Wage in Germany

Gregory

2014

SSRN Journal

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. When the Minimum Wage Bites Back: Quantile TreatmentEffects of a Sectoral Minimum Wage in Germany * Terry Gregory † Centre for European Economic Research (ZEW)Dezember 2014 AbstractIn this study we investigate the minimum wage (MW) effects for a German sub-construction sector where the MW bites extraordinary hard by international standards. Within a quasiexperiment we estimate the Quantile Treatment Effects of the MW on the conditional and unconditional distribution of earnings. For Eastern Germany, the results indicate significant real (nominal) wage increases that ripple up to about the 0.6th quantile. However, the MW also led to declining real wages (stagnating nominal wages) among upper-decile workers, thus reducing the average pay reward for high-skilled labour in the sector. We provide evidence that a rising labour cost burden for firms together with an increased bargaining power of employers over workers still employed in the sector led to wage moderation at the upper decile, particularly among smaller East German firms. Overall this paper demonstrates how a MW geared towards the lower rank may render unexpected side effects for other workers located higher up in the wage distribution and who are mostly assumed to be unaffected by such policy interventions.

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Minimum Wage Effects throughout the Wage Distribution

Cited by 153 publications

References 18 publications

Growing Apart: The Changing Firm-Size Wage Premium and Its Inequality Consequences

Growing Apart: The Changing Firm-Size Wage Premium and Its Inequality Consequences

Minimum wages and the economic well‐being of single mothers

When the Minimum Wage Bites Back: Quantile Treatment Effects of a Sectoral Minimum Wage in Germany

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