Working Paper: NBER ID: w28388
Authors: David Neumark; Peter Shirley
Abstract: The disagreement among studies of the employment effects of minimum wages in the United States is well known. Less well known, and more puzzling, is the absence of agreement on what the research literature says – that is, how economists summarize the body of evidence on the employment effects of minimum wages. Summaries range from “it is now well-established that higher minimum wages do not reduce employment,” to “the evidence is very mixed with effects centered on zero so there is no basis for a strong conclusion one way or the other,” to “most evidence points to adverse employment effects.” \nWe explore the question of what conclusions can be drawn from the literature, focusing on the evidence using subnational minimum wage variation within the United States that has dominated the research landscape since the early 1990s. To accomplish this, we assembled the entire set of published studies in this literature and identified the core estimates that support the conclusions from each study, in most cases relying on responses from the researchers who wrote these papers. Our key conclusions are: (i) there is a clear preponderance of negative estimates in the literature; (ii) this evidence is stronger for teens and young adults as well as the less-educated; (iii) the evidence from studies of directly-affected workers points even more strongly to negative employment effects; and (iv) the evidence from studies of low-wage industries is less one-sided.
Keywords: No keywords provided
JEL Codes: J23; J38
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Minimum wage increases (J38) | Negative employment effects (F66) |
| Minimum wage increases (J38) | Negative employment effects for teens and young adults (F66) |
| Minimum wage increases (J38) | Negative employment effects for less-educated workers (F66) |
| Evidence from studies of directly affected workers (J65) | Stronger negative employment effects (J65) |
| Minimum wage increases (J38) | Negative employment effects in low-wage industries (F66) |
| Dismissing evidence of negative employment effects (J65) | Ignoring substantial body of research (C90) |