2014/05/01 by David Neumark, J. M. Ian Salas, William Wascher · 483 citations
Economics, Econometrics and Finance · Engineering · Health Professions · Social Sciences · #Control (management) #Econometrics #Economic growth #Economics #Employment and Welfare Studies #Engineering #Job loss #Labor market dynamics and wage inequality #Labour economics #Management #Minimum wage #Panel data #Test (biology) #Throwing #Unemployment #Urban, Neighborhood, and Segregation Studies #Wage
paper · doi:10.1177/00197939140670s307
published in Industrial and Labor Relations Review 67(3_suppl), 608-648 (SAGE Publishing)
openalex publication_date 2014/05/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
The authors revisit the long-running minimum wage–employment debate to assess new studies claiming that estimates produced by the panel data approach commonly used in recent minimum wage research are flawed by that approach's failure to account for spatial heterogeneity. The new studies use research designs intended to control for this heterogeneity and conclude that minimum wages in the United States have not reduced employment. The authors explore the ability of the new research designs to isolate reliable identifying information, and they test the designs' untested assumptions about the construction of better control groups. Their analysis reveals problems with the new research designs. Moreover, using methods that let the data identify the appropriate control groups, their results reaffirm the evidence of disemployment effects, with teen employment elasticities near −0.15. This evidence, they conclude, still shows that minimum wages pose a tradeoff of higher wages for some against job losses for others.