The Minimum Wage and the Great Recession: Evidence from the Current Population Survey

Clemens, Jeffrey

doi:10.3386/w21830

Cited by 19 publications

(19 citation statements)

References 49 publications

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“…While Zipperer () contests this conclusion, additional evidence presented in Clemens () and Clemens and Wither () supports the original finding.…”

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confidence: 88%

Cross‐Country Evidence on Labor Market Institutions and Young Adult Employment through the Financial Crisis

Clemens

2019

Southern Economic Journal

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I develop and analyze a set of cross‐country facts regarding employment and wage setting institutions over the decade surrounding the 2008 financial crisis. Among long‐industrialized countries, young adult employment declined more than prime age employment over this time period. I show that differences in countries' wage setting institutions strongly predict variations in the magnitude of declines in young adult employment. Both unconditionally and conditional on changes in macroeconomic conditions, young adult employment declined 5 percentage points less in countries where wage setting is driven by collective bargaining arrangements than in countries with statutory wage floors. Evidence on the evolution of legislated minimum wage rates and of an asymmetry in the relationship between growth and young adult employment suggest an important role for a standard “wage rigidity” mechanism.

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“…While Zipperer () contests this conclusion, additional evidence presented in Clemens () and Clemens and Wither () supports the original finding.…”

mentioning

confidence: 88%

Cross‐Country Evidence on Labor Market Institutions and Young Adult Employment through the Financial Crisis

Clemens

2019

Southern Economic Journal

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“…For our main analyses, we use the real ($2012) minimum wage, which is the nominal wage deflated by the consumer price index, but we report results for several other measures in the Appendix and note that estimates are not sensitive to how we measure the minimum wage. Specifically, in some analyses we use the nominal minimum wage and we also follow Card () and Clemens () and normalize the minimum wage by the median wage rate in the state, and refer to this as the “relative minimum wage.” The motivation underlying this relative measure is to capture the “bite” of the minimum wage; if the median hourly wage in the state is substantially higher than the minimum wage, then the minimum wage is less binding, and increases in the minimum wage may elicit smaller responses on labor outcomes (Lee, ). Therefore, we take the ratio of the nominal minimum wage in the state to the prevailing state‐specific median “hourly” wage.…”

Section: Datamentioning

confidence: 99%

Effects of the Minimum Wage on Infant Health

Wehby¹,

Dave²,

Kaestner³

2019

J Policy Anal Manage

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The minimum wage has increased in multiple states over the past three decades and it continues to be a controversial policy. Most prior research has examined the effect of the minimum wage on employment and wages. In this study, we examine the impact of the state minimum wage on infant health. Using data on the universe of births in the U.S. over 24 years, we find that an increase in the minimum wage is associated with a small, but statistically significant increase in birthweight driven primarily by increased fetal growth rate. Effects are largest for young, married mothers. In terms of mechanisms, we find no evidence that prenatal care use and smoking during pregnancy are channels through which minimum wage improves infant health.

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“…to fewer than 3 percent of college graduates over the age of 50 (Table 1). A similar identification strategy is used by Clemens (2015) to study the employment effects of federal minimum wage increases during the Great Recession. 50 Let g denote an age-education group (high school dropouts age 20-29, high school graduates age 20-29,..., college graduates age 50+), and Bite g denote the fraction of workers (across all states and years) in group g that earn within $0.25 of the prevailing minimum wage.…”

Section: Robustnessmentioning

confidence: 99%

Minimum Wage Policy with Optimal Taxes and Unemployment

Lavecchia

2019

SSRN Journal

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This paper sheds new light on the desirability of the minimum wage in the presence of an optimal nonlinear income tax. Using a search-and-matching framework, I derive a novel condition that links the desirability of the minimum wage to three sufficient statistics: (1) the macro or general equilibrium labor force participation response to the minimum wage by low-skilled individuals; (2) the macro employment response to the minimum wage for low-skilled individuals; and (3) the welfare weight on low-skilled workers. This condition shows that the minimum wage is welfare improving if it pushes the labor market tightness-the ratio of the aggregate number of vacancies to low-skilled job seekers-closer to its efficient level. Guided by the theory, I estimate the first two sufficient statistics using an event study design, as well as state and federal minimum wage variation between 1979-2014. I estimate a macro participation elasticity of-0.24 and a macro employment elasticity of-0.32. The former represents new evidence on a previously overlooked margin of the minimum wage. With these estimates in hand, I simulate the total welfare gains from introducing a minimum wage beginning from the optimal income tax allocation. The simulations show that the minimum wage is welfare improving only if the government has very strong redistributive tastes.

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The Minimum Wage and the Great Recession: Evidence from the Current Population Survey

Cited by 19 publications

References 49 publications

Cross‐Country Evidence on Labor Market Institutions and Young Adult Employment through the Financial Crisis

Cross‐Country Evidence on Labor Market Institutions and Young Adult Employment through the Financial Crisis

Effects of the Minimum Wage on Infant Health

Minimum Wage Policy with Optimal Taxes and Unemployment

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