Effects of the minimum wage on employment dynamics
Open accessAbstract
The voluminous literature on minimum wages offers little consensus on the extent to which a wage floor impacts employment.We argue that the minimum wage will impact employment over time, through changes in growth rather than an immediate drop in relative employment levels.We show that commonly-used specifications in this literature, especially those that include state-specific time trends, will not accurately capture these effects.Using three separate state panels of administrative employment data, we find that the minimum wage reduces job growth over a period of several years.This finding is supported using several empirical specifications.
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There appears to be a dynamic effect of increasing the minimum wage.
“As in Meer and West (2016), there also appears to be a dynamic effect of increasing the minimum wage.”
From Difference-in-Differences with multiple time periods (2021) · cites this paper as Meer and West (2016)
Understanding the effect of a minimum wage change on employment is a challenging case for TWFE as the effect of the minimum wage may be dynamic and the timing of minimum wage changes varies across states.
“Moreover, one might expect that understanding the effect of a minimum wage change on employment is a challenging case for TWFE as the effect of the minimum wage may be dynamic (Meer and West (2016)) and the timing of minimum wage changes varies across states.”
From Difference-in-Differences with multiple time periods (2021) · cites this paper as Meer and West (2016)
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- Authors
- Meer, J., & West, J.
- Affiliations
- National Bureau of Economic Research (US)
- Venue
- Journal of Human Resources
- Publisher
- University of Wisconsin Press
- Published
- 2015-11-30
- Volume
- 51
- Issue
- 2
- Pages
- 500-522
- ISSN
- 0022-166X (ISSN-L)
- 1548-8004
- OpenAlex
- W4230865396
- Cited by
- 446
- References
- 42
- Citations by year
- 2026: 30 · 2025: 37 · 2024: 33 · 2023: 59 · 2022: 56 · 2021: 51 · 2020: 51 · 2019: 49 · 2018: 32 · 2017: 34 · 2016: 6 · 2015: 3 · 2014: 3
- FWCI
- 60.09
- Type
- journal article
- Language
- en
- Open access
- bronze
- doi.org
- Locations
- The Journal of Human Resources (publishedVersion)
- Funders
- W.E. Upjohn Institute for Employment Research
- Institut für Arbeitsmarkt- und Berufsforschung
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Labor market dynamics and wage inequality
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Historical Economic and Social Studies
- Social Sciences › Gender Studies › Gender, Labor, and Family Dynamics
- Keywords
- minimum wage, employment dynamics, job growth, wage floor, labor market outcomes
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