Minimum Wages and Retirement

Borgschulte, Mark; Cho, Heepyung

doi:10.1177/0019793919845861

Cited by 11 publications

(5 citation statements)

References 39 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Laws (2018) and Godoy et al ( 2020) study changes in labor force participation of specific subgroups such as youth and parents. Borgschulte and Cho (2019) studies the impact on workers close to retirement. Furthermore, Adams et al (2018) study the impact on aggregate job search.…”

Section: Introductionmentioning

confidence: 99%

Seeing beyond the Trees: Using Machine Learning to Estimate the Impact of Minimum Wages on Labor Market Outcomes

Cengiz¹,

Dubé

Lindner

et al. 2022

Journal of Labor Economics

View full text Add to dashboard Cite

We assess the effect of the minimum wage on labor market outcomes such as employment, unemployment, and labor force participation for most workers affected by the policy. We apply modern machine learning tools to construct demographically-based treatment groups capturing around 75% of all minimum wage workers-a major improvement over the literature which has focused on fairly narrow subgroups where the policy has a large bite (e.g., teens). By exploiting 172 prominent minimum wages between 1979 and 2019 we find that there is a very clear increase in average wages of workers in these groups following a minimum wage increase, while there is little evidence of employment loss. Furthermore, we find no indication that minimum wage has a negative effect on the unemployment rate, on the labor force participation, or on the labor market transitions. Furthermore, we detect no employment or participation responses even for sub-groups that are likely to have a high extensive margin labor supply elasticity-such as teens, older workers, or single mothers. Overall, these findings provide little evidence for changing search effort in response to a minimum wage increase.

show abstract

Section: Introductionmentioning

confidence: 99%

Seeing beyond the Trees: Using Machine Learning to Estimate the Impact of Minimum Wages on Labor Market Outcomes

Cengiz¹,

Dubé

Lindner

et al. 2022

Journal of Labor Economics

View full text Add to dashboard Cite

show abstract

“…Godoey, Reich, and Wursten (forthcoming) find that minimum wage increases make childcare more affordable, thereby raising employment rates among low-educated mothers of young children. Borgschulte and Cho (2020) find that higher earnings lead older workers to postpone their retirements. These positive supply-side effects provide another explanation of why minimum wages can have such small employment effects: Negative demand and positive supply effects somewhat offset each other.…”

Section: Labor Supplymentioning

confidence: 96%

Response to Michael Reich

Strain¹

2021

J Policy Anal Manage

View full text Add to dashboard Cite

The federal minimum wage was increased most recently 12 years ago, when it was set at $7.25. Since then, price inflation has translated into a substantial decline in the real value of that $7.25 minimum wage. As the value of the federal minimum wage has declined, many states and cities have stepped in to set their own local minimum wages at levels above $7.25. According to the Economic Policy Institute, 30 states and the District of Columbia now have a minimum wage higher than the federal minimum wage, and 45 localities have adopted minimum wages above their state minimum wage. Earlier this year, the Raise the Wage Act of 2021 was introduced to raise the federal minimum wage, in annual increments, to $15 per hour by June 2025 and then adjust it to increase at the same rate as median hourly wages. So far, the legislation does not have enough support to pass the Senate.In this Point/Counterpoint debate, we address whether it is in the public's interest to gradually increase the minimum wage over five years to $15 per hour, as proposed in the Raise the Wage Act. 1 Michael Strain of the American Enterprise Institute argues that the proposed increase is large enough that it risks generating substantial job losses. Strain acknowledges that the increase in the minimum wage would increase incomes for the working poor, but he believes that the Earned Income Tax Credit could be used to generate similar benefits without incurring the job losses that would result from a higher minimum wage. Michael Reich of the University of California at Berkeley asserts that the magnitude of the proposed minimum wage increase is not unprecedented, and the most careful empirical studies demonstrate that the job losses associated with an increase of this magnitude are likely to be minimal. Those studies show that past minimum wage increases tended to be absorbed through small price increases in the affected industries, with minimal negative effects on employment. ACKNOWLEDGMENTI thank Kevin Kelly of Mathematica for outstanding assistance in organizing this section.

show abstract

“…Even in the absence of firm power, the MW is a direct distributional tool and often seen as an appealing policy option for governments to help alleviate in-work poverty, and reduce income inequality, while imposing limited direct fiscal costs. MWs also interact with social security systems including pensions (Borgschulte and Cho 2019) and prevent the dilution of tax credits and wage subsidies (Rothstein and Zipperer 2020). The discussion regarding the impact of MW on restoring labor market inclusiveness hinges critically on the extent and scope of market power across sectors and occupations.…”

Section: Minimum Wagesmentioning

confidence: 99%

Labor Markets

El-Ganainy¹,

Ernst²,

Merola³

et al. 2021

How to Achieve Inclusive Growth

View full text Add to dashboard Cite

Labor earnings are the dominant income source for most individuals. Thus, an inclusive labor market is key for ensuring inclusive growth. In this chapter we propose four principles that an inclusive labor market will embody: access, fairness, protection and voice. While measuring inclusivity presents challenges, we discuss how data can be used to shed light on the extent of inclusivity and document cross-country trends and stylized facts. We also discuss the role of policy in achieving an inclusive labor market, focusing on the need to rebalance growth; improve risk sharing; and fight discrimination. Several messages emerge. First, some policies entail a trade-off between the different dimensions of inclusivity. Second, it is important to view policies as a bundle, taking into account substitution and complementarities. Third, some policies are win-win, in the sense that they both increase inclusivity and improve overall efficiency.

show abstract

Minimum Wages and Retirement

Cited by 11 publications

References 39 publications

Seeing beyond the Trees: Using Machine Learning to Estimate the Impact of Minimum Wages on Labor Market Outcomes

Seeing beyond the Trees: Using Machine Learning to Estimate the Impact of Minimum Wages on Labor Market Outcomes

Response to Michael Reich

Labor Markets

Contact Info

Product

Resources

About