Myth or Measurement: What Does the New Minimum Wage Research Say About Minimum Wages and Job Loss in the United States?

Neumark, David; Shirley, Peter

doi:10.2139/ssrn.3772635

Cited by 8 publications

(21 citation statements)

References 0 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Next I study the effect of the minimum wage on the occupational mobility of workers with different levels of education. Workers with low levels of education are more likely to earn the minimum wage than workers with high levels of education (e.g., Neumark and Shirley, 2021). I construct the state‐level monthly occupational mobility rate for two groups of workers: those with a high‐school degree or less education and those with at least a college degree.…”

Section: Resultsmentioning

confidence: 99%

The Minimum Wage and Occupational Mobility

Liu

2021

Int Economic Review

View full text Add to dashboard Cite

This article quantifies the effect of minimum wages on workers' occupational mobility. I show that minimum wages decrease younger, less‐educated workers' occupational mobility and are associated with more mismatch. A search‐and‐matching model highlights two channels by which the minimum wage decreases occupational mobility. First, it compresses wages and reduces the gain from switching, leading to lower occupational mobility and more mismatch. Second, it decreases vacancy posting. Calibrating the model to the U.S. economy, the results suggest that a 15 dollar minimum wage can damp aggregate output by 0.4%, of which the wage compression channel accounts for 80%.

show abstract

Section: Resultsmentioning

confidence: 99%

The Minimum Wage and Occupational Mobility

Liu

2021

Int Economic Review

View full text Add to dashboard Cite

show abstract

“…For a summary of preferred estimates from published studies, see Neumark and Shirley (2020). 40 The larger poverty-reduction effects the 100% and 150% thresholds are consistent with the more negative effects in columns ( 5) and ( 6) vs. columns (2) and (3).…”

mentioning

confidence: 67%

Effects of recent minimum wage policies in California and nationwide: Results from a pre‐specified analysis plan

Neumark

Yen

2021

Industrial Relations

Self Cite

View full text Add to dashboard Cite

We analyze the impacts of recent city minimum wage increases in California and nationwide, following a pre‐analysis plan (PAP) registered prior to the release of data covering two years of minimum wage increases. For California cities, we find a hint of negative employment effects. Nationally, we find some evidence of disemployment effects for teens, but not young adults or high school dropouts. City‐specific analyses provide limited evidence of adverse effects on the share low‐income, but the pooled city analysis does not; the national analysis generally finds no impact on the share low‐income, except for reductions in the share near‐poor, although that may at least partly reflect prior trends. All told, we view the results as providing neither strong evidence of substantial adverse effects of city minimum wages, nor strong evidence of substantial beneficial effects.

show abstract

“…For instance, a high degree of monopsony has been used to explain posive employment effects in fast-food restauration after the increase in the New Jersey minimum wage in 1992 as documented by Card and Krüger (1995). Alternatively, in the absence of observing an increase in employment when minimum wages are introduced or raised, researchers have concluded that the degree of monopsony in that specific labour market segment must be low or absent (Neumark and Wascher, 2008;Neumark and Shirley, 2021). 10 As noted by Manning (2003), however, the observed relationship between the introduction of a minmum wage and changes in employment might depend on the specific market characteristics: Under the assumption of free entry of firms, for instance, an increase in minimum wages can lead to both increases or decreases in employment, even in a situation of monopsony.…”

Section: How To Measure Labour Market Concentrationmentioning

confidence: 99%

“…As discussed by Manning (2003), until recently most economists found it unlikely for employers to exercise market power other than in small pockets and under specific circumstances. Partly, this assessment was based on particular circumstances of minimum wage adjustment an the following labour market reaction, which was not thought in line with theoretical predictions (see, for instance, Neumark and Shirley, 2021, and the examples studied therein). Nevertheless, a substantial body of research has developed in documenting the (country) circumstances and types of jobs for which monopsony could be empirically established.…”

Section: Introductionmentioning

confidence: 99%

How has labour market power evolved? Comparing labour market monopsony in Peru and the United States

Dávalos¹,

Ernst²

2021

Preprint

View full text Add to dashboard Cite

We document and compare the extent and evolution of labour market power by employers on the US and Peruvian labour markets during the 2010s. Making use of a structural estimation model of labour market dynamics, we estimate differences in market power that workers face depending on their sector of activity, their age, sex, location and educational level. In particular, we show that differences in cross-sectional market power are significant and higher than variations over the tenyear time span of our data. In contrast to findings of labour market power in developed countries such as the US, we document significant market power of employers in Peru vis-à-vis the tertiary educated workforce, regardless of age and sector. In contrast, for the primary educated workforce, market power seems to be high in (private) services and manufacturing. For secondary educated workers, only the mining sector stands out as moderately more monopsonistic than the rest of the labour market. We also show that at least for the 2010s, labour market power declined in Peru. We contrast these findings with similar estimates obtained for the United States where we are able to show that increases in labour market power are particularly acute in certain sectors, such as agriculture and entertainment and recreational services, as well as in specific geographic areas where these sectors are dominant. Moreover, we show that for the US, the labour market power has gradually increased over the past ten years, in line with the general rise in inequality. Importantly, we show that the pervasive gender pay gap cannot be linked to differential market power as men face higher labour market power than women. We also discuss possible reasons for these findings, including for the differences of labour market power across skill levels. Especially, we discuss the reasons for polarization of market power that are specific to sectors and locations.

show abstract

Myth or Measurement: What Does the New Minimum Wage Research Say About Minimum Wages and Job Loss in the United States?

Cited by 8 publications

References 0 publications

The Minimum Wage and Occupational Mobility

The Minimum Wage and Occupational Mobility

Effects of recent minimum wage policies in California and nationwide: Results from a pre‐specified analysis plan

How has labour market power evolved? Comparing labour market monopsony in Peru and the United States

Contact Info

Product

Resources

About