The Contribution of the Minimum Wage to US Wage Inequality over Three Decades: A Reassessment

Autor, David H.; Manning, Alan; Smith, Christopher L.

doi:10.1257/app.20140073

Cited by 284 publications

(301 citation statements)

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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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“…However, studies vary with respect to the magnitude of this effect (see Lee, 1999;Teulings, 2003;DiNardo et al, 1996;Autor et al, 2016). Several studies have also investigated spillover effects to higher-wage segments, but come to divergent conclusions (Autor et al, 2016;Dickens and Manning, 2004a;Stewart, 2012).…”

Section: Distributional Effects Of Minimum Wagesmentioning

confidence: 99%

“…Several studies have also investigated spillover effects to higher-wage segments, but come to divergent conclusions (Autor et al, 2016;Dickens and Manning, 2004a;Stewart, 2012). However, Autor et al (2016) mentions that the nature of spillovers is not fully understood and might be at least partly attributed to errors in measuring wages in survey data.…”

Section: Distributional Effects Of Minimum Wagesmentioning

confidence: 99%

The Short-Term Distributional Effects of the German Minimum Wage Reform

et al. 2017

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in SOEPpapers on Multidisciplinary Panel Data Research at DIW BerlinThis series presents research findings based either directly on data from the German SocioEconomic Panel study (SOEP) or using SOEP data as part of an internationally comparable data set (e.g. CNEF, ECHP, LIS, LWS, CHER/PACO). SOEP is a truly multidisciplinary household panel study covering a wide range of social and behavioral sciences: economics, sociology, psychology, survey methodology, econometrics and applied statistics, educational science, political science, public health, behavioral genetics, demography, geography, and sport science.The decision to publish a submission in SOEPpapers is made by a board of editors chosen by the DIW Berlin to represent the wide range of disciplines covered by SOEP. There is no external referee process and papers are either accepted or rejected without revision. Papers appear in this series as works in progress and may also appear elsewhere. They often represent preliminary studies and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be requested from the author directly.Any opinions expressed in this series are those of the author(s) and not those of DIW Berlin.Research disseminated by DIW Berlin may include views on public policy issues, but the institute itself takes no institutional policy positions. Working Paper AbstractThis study quantifies the short-term distributional effects of the new statutory minimum wage in Germany. Using detailed survey data (German Socio-Economic Panel), we assess changes in the distributions of hourly wages, contractual and actual working hours, and monthly earnings. Our descriptive results indicate growth at the bottom of the hourly wage distribution in the post-reform year, but also considerable noncompliance among eligible employees. In a second step, we employ a difference-in-differences analysis and exploit regional variation in the "bite" of the intervention, measured by the share of employees in a geographical region with wages below the minimum wage prior to the reform. We document the reform's positive effect at the bottom of the wage distribution. However, we find a negative effect of the reform on contractual hours worked, which explains why there is no effect on monthly earnings. Given that actual hours worked decrease less than contractual hours, our evidence suggests an increase in unpaid overt...

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“…Du Caju et al, 2009). Several empirical studies find that minimum wages have spillover effects on other wages 6 (see, for instance, Grossman, 1983, Card and Krueger 1995, Machin et al, 2003, Dickens and Manning, 2004, Neumark and Wascher, 2004, Gregory, 2015, Autor et al, 2016. From a theoretical point of view, NMW spillover effects can act through three different channels: first, firms that used to pay higher wages to attract better workers (from low-wage firms) are forced to increase their wages to keep on hiring workers (Manning, 2003); second, firms should raise wages of highwage workers to prevent them from reducing their effort and to maintain the wage hierarchy within the firm (Grossman, 1983); third, after a NMW increase, if skilled and unskilled workers are substitutes, the labour demand of skilled workers shifts to the right, which results in higher wages for skilled workers.…”

Section: Introductionmentioning

confidence: 99%

The Impact of the National Minimum Wage on Industry-Level Wage Bargaining in France

2016

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Abstract:This paper examines empirically how industry-level wage floors are set in French industrylevel wage agreements and how the national minimum wage (NMW) interacts with industrylevel wage bargaining. For this, we use a unique dataset containing about 48,000 occupationspecific wage floors, in more than 340 French industries over the period [2006][2007][2008][2009][2010][2011][2012][2013][2014]. We find that the NMW has a significant impact on the seasonality and on the timing of the wage bargaining process. Inflation, past sectoral wage increases and real NMW increases are the main drivers of wage floor adjustments; elasticities of wage floors with respect to these macro variables are 0.6, 0.3 and 0.25 respectively. Wage floor elasticities to inflation and to the NMW both decrease along the wage floor distribution but are still positive for all levels of wage floors.Keywords: minimum wage, collective bargaining, wages. For that purpose, we collect a large and unique new data set containing all industry-specific scales of wage floors for more than 340 French industries (covering more than 90% of workers of the private sector) over the period 2006-2014. In each industry, wage floors are defined for a specific classification of representative occupations and are used by firms as a reference to set their wages. In our data set, we are able to compute the size of wage floor adjustments between two wage agreements for each occupation. Overall, our data set contains more than 48,000 wage floors for more than 6,000 different occupations defined in industry agreements.Our paper provides new stylized facts on how wage floors are adjusted in France. We first find that the frequency of wage floor adjustments is highly time-and duration-dependent: industrylevel wage agreements are much more frequent during the first quarter of the year, and the usual duration between two wage agreement signing (and so, between two wage floor adjustments) is one year. The frequency of wage floor adjustments is also positively affected by variations of macro variables such as inflation and the growth rate of aggregate wages. Concerning the size of wage floor adjustments, we provide evidence that past inflation plays a key role in 4 explaining the size of wage adjustments. Industry-specific shocks contribute to wage floor increases as long as NMW or inflation increases are not binding.Our second contribution is to investigate the interactions between NMW adjustments and the setting of industry-level wage floors. In France, one important channel of transmission of NMW increases to other wages may come from industry-level wage agreements. To assess the impact of the NMW increases on wage floors, we rely on a Tobit model to disentangle the simultaneous effects of NMW increases on the frequency of wage agreements and on the size of wage floor adjustments. Using changes in the macro variables since the last wage agreement in a given industry, we are able to construct industry-specific variables and to better identify their effects on wage floor...

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The Contribution of the Minimum Wage to US Wage Inequality over Three Decades: A Reassessment

Cited by 284 publications

References 16 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

The Short-Term Distributional Effects of the German Minimum Wage Reform

The Impact of the National Minimum Wage on Industry-Level Wage Bargaining in France

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