Working Paper: NBER ID: w23584
Authors: David Neumark
Abstract: The literature on the employment effects of minimum wages is about a century old, and includes hundreds of studies. Yet the debate among researchers about the employment effects of minimum wages remains intense and unsettled. This essay discusses the key questions that have arisen in the past research that, if we can answer them, may prove most useful in making sense of the conflicting evidence. I also focus on additional questions we should consider to better inform the policy debate, in particular in the context of the very high minimum wages coming on line in the United States, about which past research is quite uninformative.
Keywords: minimum wage; employment effects; labor economics; econometrics; panel data; controls; trends
JEL Codes: J23; J38
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Higher minimum wages (J38) | Varying magnitudes of effect on employment (J63) |
| Binding minimum wage (J38) | Stronger disemployment effects (J65) |
| Variation in findings (C90) | Differences in study design, econometric methods, and economic context (O57) |
| Higher minimum wages (J38) | Reduce employment among low-skilled workers (F66) |
| Close controls (E64) | Disemployment effects statistically indistinguishable from zero (J65) |
| Triple-difference estimators (C22) | Larger negative employment elasticities (J69) |