Working Paper: NBER ID: w27090
Authors: Jeffrey Clemens; Lisa B. Kahn; Jonathan Meer
Abstract: We explore whether minimum wage increases result in substitution from lower-skilled to slightly higher-skilled labor. Using 2011-2016 American Community Survey data (ACS), we show that workers employed in low-wage occupations are older and more likely to have a high school diploma following recent statutory minimum wage increases. To better understand the role of firms, we examine the Burning Glass vacancy data. We find increases in a high school diploma requirement following minimum wage hikes, consistent with our ACS evidence on stocks of employed workers. We see substantial adjustments to requirements both within and across firms.
Keywords: minimum wage; skill upgrading; labor market
JEL Codes: J23; J24; J3; J42
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Minimum wage increases (J38) | decrease in employment shares of young adults and those without a high school diploma in low-wage occupations (J29) |
| Minimum wage increases (J38) | increase in high school diploma requirements in job postings (J24) |
| Minimum wage increases (J38) | labor-labor substitution towards higher-skilled workers (J24) |