Effects of the Minimum Wage on Employment Dynamics

2015/11/30 by Jonathan Meer, Jeremy West · 3 citations
Economics, Econometrics and Finance · Health Professions · Social Sciences · #Labor market dynamics and wage inequality #Employment and Welfare Studies #Labor Movements and Unions

paper · pdf · doi:10.3368/jhr.51.2.0414-6298r1

openalex publication_date 2015/11/30 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28

Abstract

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.

Citations

• Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations

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