The Minimum Wage and the Great Recession: Evidence of Effects on the Employment and Income Trajectories of Low-Skilled Workers

Clemens, Jeffrey; Wither, Michael

doi:10.3386/w20724

Cited by 76 publications

(141 citation statements)

References 27 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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“…Douglas Holtz-Eakin and Ben Gitis (Holtz-Eakin and Gitis 2015) duplicated the CBO analysis for larger minimum wages increase, to $12/hour and $15/hour by the year 2020, both of which have been proposed. 16 They used the CBO methodology, as well as some higher dis-employment effects proposed by other researchers: Jonathan Meer and Jeremy West (Meer and West 2016), who estimated intermediate-sized job loss effects, but much larger than the CBO estimates, and Jeffrey Clemens and Michael Wither (Clemens and Wither 2014), who estimated extremely large disemployment effects.…”

Section: The Minimum Wage In the United Statesmentioning

confidence: 99%

The Relative Effectiveness of the Minimum Wage and the Earned Income Tax Credit as Anti-Poverty Tools

Quinn

Cahill

2017

Religions

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Abstract:In the search for effective measures to combat poverty, two government policies have been given much attention. One is the establishment of a federal minimum wage to help workers secure a decent standard of living. The second measure is the Earned Income Tax Credit, which gives tax refunds to workers in households that fall below a set standard of income. Both policies have supporters and critics regarding the effectiveness of the policies. This essay provides an economic analysis of the two measures. Among the issues discussed are how the policies affect employment and poverty, and how well targeted they are at the population at risk.

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“…Consistent with minimum wages being increased when youth labor market conditions are strong-in contrast to the conjecture in Allegretto et al and Dube et al-their IV estimates point to stronger disemployment effects than many past studies, with an elasticity of employment for teenagers that is often closer to −0.5. Clemens and Wither (2014) confront the same issue in a different way. They focus on the 2007-2009 federal increases, comparing changes in employment for those whose wages were swept up by the federal increases (because of lower state minimum wages) to changes for workers who earned wages that were low but above the levels to which the federal minimum wage increased.…”

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confidence: 99%

Policy levers to increase jobs and increase income from work after the Great Recession

Neumark

2016

IZA J Labor Policy

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The depth of the Great Recession, the slow recovery of job creation, the downward trend in labor force participation, high long-term unemployment, stagnant or declining wages for low-to-medium skill jobs owing to adverse labor demand shifts, and a greater rebound in low-wage than mid-or higher-wage jobs raised concerns that the normal business cycle dynamics of recovery from the recession will be insufficient to offset the diminished labor market prospects of many workers. These concerns have spurred serious consideration of policies to encourage job creation and higher income from work beyond the more immediate countercyclical policies that were adopted in response to the Great Recession. Among the policies generating continuing or renewed interest are hiring credits, higher (sometimes much higher) minimum wages, and a more substantial earned income tax credit (EITC) for childless individuals. This paper discusses these policy options, what we know about their likely effects and trade-offs, and what the unanswered questions are; the focus is on US evidence.JEL codes: J2, J3, J6

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The Minimum Wage and the Great Recession: Evidence of Effects on the Employment and Income Trajectories of Low-Skilled Workers

Cited by 76 publications

References 27 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

The Relative Effectiveness of the Minimum Wage and the Earned Income Tax Credit as Anti-Poverty Tools

Policy levers to increase jobs and increase income from work after the Great Recession

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