scholarly journals The Contribution of the Minimum Wage to US Wage Inequality over Three Decades: A Reassessment

2016 ◽  
Vol 8 (1) ◽  
pp. 58-99 ◽  
Author(s):  
David H. Autor ◽  
Alan Manning ◽  
Christopher L. Smith
Keyword(s):  
Minimum Wage ◽  
Wage Inequality ◽  
Wage Structure ◽  
Earnings Inequality ◽  
Minimum Wages ◽  
Wage Distribution ◽  
Prior Work ◽  
Lower Tail ◽  
Structure Changes ◽  
Wage Effects

We reassess the effect of minimum wages on US earnings inequality using additional decades of data and an IV strategy that addresses potential biases in prior work. We find that the minimum wage reduces inequality in the lower tail of the wage distribution, though by substantially less than previous estimates, suggesting that rising lower tail inequality after 1980 primarily reflects underlying wage structure changes rather than an unmasking of latent inequality. These wage effects extend to percentiles where the minimum is nominally nonbinding, implying spillovers. We are unable to reject that these spillovers are due to reporting artifacts, however. (JEL J22, J31, J38, K31)

scholarly journals The Effect of Provincial Minimum Wage on Wage Inequality in Java

2019 ◽  
pp. 352-357
Author(s):  
Daniel Bastian Lubis ◽  
Syamsul Hidayat Pasaribu ◽  
Muhammad Findi
Keyword(s):  
Income Inequality ◽  
Labor Force ◽  
Minimum Wage ◽  
Wage Inequality ◽  
Wage Gap ◽  
Negative Impact ◽  
Minimum Wages ◽  
Wage Distribution ◽  
Wage Setting ◽  
The Impact

The minimum wage setting policy as an effort to improve wage distribution and expected to reduce income inequality is still being a debate in the literatures. However, similar studies, especially those that examine the impact of establishing minimum wages on the conditions of wages for workers in different percentile groups, have not been widely practiced in Indonesia. This study aims to analyze the increase in effective minimum wages against the wage gap of workers in the period 2008-2017 in Java using the National Labor Force Survey (Sakernas) data. Through the OLS method, we find that the impact of minimum wages is not the same among percentile groups. The effective minimum wage has a negative impact on the wage 30th percentile group where an increase in effective wage will reduces the gap between the 30th percentile and the 50th percentile. We find different result on 60th percentile. On this percentile, the effective minimum wage will increases the gap between the 60th percentile and the 50th percentile, this result implies a spillover.

scholarly journals The Role of the Minimum Wage on the Declining Wage Inequality in Latin America: Evidence from Brazil.

2019 ◽  
Vol 11 (1) ◽  
pp. 39-82
Author(s):  
Paul Garcia Hinojosa
Keyword(s):  
Minimum Wage ◽  
Wage Inequality ◽  
Sharp Increase ◽  
Wage Distribution ◽  
Lower Tail ◽  
The Real ◽  
The Past ◽  
Formal Employment ◽  
Real Value

Over the past two decades, the downward trend of income inequality in Brazil has been accompanied by a sharp increase in the real value of the minimum wage. There is no empirical consensus on whether the minimum wage has an equalizing effect on income distribution because of its ambiguous effects on employment. I document the effectiveness of the minimum wage on compressing wage inequality throughout the wage distribution and its effects on employment by using Brazilian regional data over the post-inflationary period (1995-2015). A counterfactual exercise shows that half of the decline in lower-tail inequality is attributable to the increase in the real minimum wage whereas the effects of the minimum wage on upper-tail inequality are negligible. Furthermore, the increase in the minimum wage has small contemporaneous adverse effects on formal employment which appear to vanish after three quarters.JEL classification: E24Keywords: wage inequality, employment, minimum wage.

scholarly journals The impact of a minimum wage change on the distribution of wages and household income

2020 ◽  
Author(s):  
Paul Redmond ◽  
Karina Doorley ◽  
Seamus McGuinness
Keyword(s):  
Income Distribution ◽  
Minimum Wage ◽  
Wage Inequality ◽  
Household Income ◽  
Spillover Effects ◽  
Wage Distribution ◽  
Wage Increase ◽  
Minimum Wage Increase ◽  
Wage Change ◽  
The Impact

Abstract We use distribution regression analysis to study the impact of a 6% increase in the Irish minimum wage on the distribution of hourly wages and household income. Wage inequality, measured by the ratio of wages in the 90th and 10th percentiles and the 75th and 25th percentiles, decreased by approximately 8 and 4%, respectively. The results point towards wage spillover effects up to the 30th percentile of the wage distribution. We show that minimum wage workers are spread throughout the household income distribution and are often located in high-income households. Therefore, while we observe strong effects on the wage distribution, the impact of a minimum wage increase on the household income distribution is quite limited.

scholarly journals The Minimum Wage Affects Them All: Evidence on Employment Spillovers in the Roofing Sector

2013 ◽  
Vol 14 (3) ◽  
pp. 282-315 ◽  
Author(s):  
Bodo Aretz ◽  
Terry Gregory ◽  
Melanie Arntz
Keyword(s):  
Minimum Wage ◽  
Scale Effects ◽  
Minimum Wages ◽  
Wage Distribution ◽  
Employment Effects ◽  
Eastern Germany

Abstract This study contributes to the sparse literature on employment spillovers of minimum wages. We exploit the minimum wage introduction and subsequent increases in the German roofing sector that gave rise to an internationally unprecedented hard bite of a minimum wage. We look at the chances of remaining employed in the roofing sector for workers with and without a binding minimum wage and use the plumbing sector that is not subject to a minimum wage as a suitable benchmark sector. By estimating the counterfactual wage that plumbers would receive in the roofing sector given their characteristics, we are able to identify employment effects along the entire wage distribution. The results indicate that the chances for roofers to remain employed in the sector in eastern Germany deteriorated along the entire wage distribution. Such employment spillovers to workers without a binding minimum wage may result from scale effects and/or capital-labour substitution.

scholarly journals Expanding higher education and wage inequality in Chile

2020 ◽  
Vol 47 (4) ◽  
pp. 877-889
Author(s):  
Yoshimichi Murakami ◽  
Tomokazu Nomura
Keyword(s):  
Higher Education ◽  
Wage Inequality ◽  
Household Survey ◽  
Wage Structure ◽  
Wage Distribution ◽  
Structure Effect ◽  
Composition Effect ◽  
Content Type ◽  
Subsequent Decrease ◽  
Using Data

PurposeThis study aims to analyse the contribution of the expansion and diversification of higher education to Chile's increase in wage inequality from 1992 to 2000 and its subsequent decrease from 2000 to 2013.Design/methodology/approachThe wage equation for each year is estimated using data from the national household survey, Encuesta de Caracterización Socioeconómica Nacional (CASEN). Using the method proposed by Firpo et al. (2009), the evolution of wage changes is decomposed into composition and wage structure effects of each explanatory variable at different points of the wage distribution.FindingsThe results show that the positive composition effect of higher education, derived from the increasing share of both workers with university degrees and those with vocational degrees, is substantially larger at the upper quantiles and exceeds the negative wage structure effect, thereby contributing to increasing wage inequality from 1992 to 2000. By contrast, the negative wage structure effect of higher education, primarily derived from the decreasing return to university degrees, is substantially larger at the upper quantiles and exceeds the positive composition effect, thereby contributing to decreasing wage inequality from 2000 to 2013.Originality/valueThis study contributes to the literature by showing that the expansion of higher education increased inequality in the 1990s and decreased it in the 2000s while the increasing supply of workers with vocational degrees decreased wage premiums for university degrees in the latter period.

scholarly journals The Effect of Minimum Wages on Low-Wage Jobs*

2019 ◽  
Vol 134 (3) ◽  
pp. 1405-1454 ◽  
Author(s):  
Doruk Cengiz ◽  
Arindrajit Dube ◽  
Attila Lindner ◽  
Ben Zipperer
Keyword(s):  
Minimum Wage ◽  
State Level ◽  
The United States ◽  
Minimum Wages ◽  
Wage Distribution ◽  
Employment Effect ◽  
Hourly Wage ◽  
Difference In Differences ◽  
Bottom Part ◽  
Demographic Groups

Abstract We estimate the effect of minimum wages on low-wage jobs using 138 prominent state-level minimum wage changes between 1979 and 2016 in the United States using a difference-in-differences approach. We first estimate the effect of the minimum wage increase on employment changes by wage bins throughout the hourly wage distribution. We then focus on the bottom part of the wage distribution and compare the number of excess jobs paying at or slightly above the new minimum wage to the missing jobs paying below it to infer the employment effect. We find that the overall number of low-wage jobs remained essentially unchanged over the five years following the increase. At the same time, the direct effect of the minimum wage on average earnings was amplified by modest wage spillovers at the bottom of the wage distribution. Our estimates by detailed demographic groups show that the lack of job loss is not explained by labor-labor substitution at the bottom of the wage distribution. We also find no evidence of disemployment when we consider higher levels of minimum wages. However, we do find some evidence of reduced employment in tradeable sectors. We also show how decomposing the overall employment effect by wage bins allows a transparent way of assessing the plausibility of estimates.

scholarly journals Minimum Wages in Monopsonistic Labor Markets

2020 ◽  
Author(s):  
Luis Felipe Munguia Corella
Keyword(s):  
Labor Markets ◽  
Minimum Wage ◽  
Minimum Wages ◽  
Perfect Competition ◽  
External Shocks ◽  
Omitted Variables ◽  
Heterogeneous Effects ◽  
Wage Effects ◽  
Teenage Employment ◽  
The U.S

Over the last 30 years, researchers have disputed the mixed evidence of the effect of the minimum wage on teenage employment in the U.S. Whenever the minimum wage has positive or no effects on employment, they appeal to monopsony models to explain their results. However, very few of these studies have empirically tested whether their results are due to monopsonistic characteristics in the labor markets. In this paper, I estimate the effects of the minimum wage for the U.S. under concentrated labor markets and low-mobility jobs (two variables that measure monopsony), identify heterogeneous effects among different scenarios derived from the monopsony model, and provide a plausible explanation of the mixed results about the minimum wage effects in the literature. My main findings indicate that minimum wages have an elasticity to teenage employment of -0.418 under perfect competition, which is, as expected, much higher than the usual results in the literature. If the monopsony variable is one standard deviation higher than the baseline, it implies a positive change in elasticity between of 0.05. The minimum wage has a positive insignificant effect between 0.04 and 0.29 under full monopsonistic labor markets. The results are consistent among different specifications and controlling for possible external shocks to the monopsony and omitted variables.

Changes in the Turkish Wage Structure in the EU Accession Process

2016 ◽  
pp. 187-208
Author(s):  
Nursel Aydiner-Avsar ◽  
M. Burak Onemli
Keyword(s):  
Wage Inequality ◽  
College Education ◽  
Wage Structure ◽  
Wage Distribution ◽  
Eu Accession ◽  
Job Status ◽  
Related Factors ◽  
Accession Process ◽  
Major Factors ◽  
The Eu

This chapter aims to analyze the evolution of Turkish wage structure following the introduction of new labor law in 2003 in the EU accession process. The authors first present a descriptive picture of the changes in wage inequality between 2003 and 2013. They then conduct an econometric analysis of the relative importance of individual, job- and workplace-related factors on wages across the wage distribution to understand what drives this outcome. It is found that wage inequality decreased from 2003 to 2007, and increased during the global economic crisis. Increased returns to college education, skilled white collar jobs as well as returns to construction sector stand out as the major factors increasing wage inequality. Though to a lesser extent, increased returns to blue-collar jobs, formal job status and reduced returns to employment in large firms are factors reducing wage inequality in Turkey in the post-2003 era.

The minimum social guarantee of employees’ wages in Russia: 2020-2021

2021 ◽  
Vol 17 (4) ◽  
pp. 478-490
Author(s):  
Lyudmila Migranova ◽  
Raisa Popova
Keyword(s):  
Minimum Wage ◽  
Wage Inequality ◽  
Russian Federation ◽  
Minimum Wages ◽  
Climate Conditions ◽  
The Past ◽  
Extreme Climate ◽  
Federal Minimum Wage ◽  
The Russian Federation ◽  
Set Up

In 2021 the methodological approaches to the assessment of the minimum wage and the subsistence minimum level (SML) undergone significant changes. According to federal law No 473-FZ of December 29, 2020, these minimum social guarantees are to be calculated relative to the median wage (at 42%) and the median per capita income (at 44.2%) for the past year. This article reviews the changes in the minimum social guarantees as regards employees’ wages in Russia and its regions in the past two years. A new methodology for estimating the median wages had not been developed by the start of 2021. According to Law No 473-FZ the federal minimum wage was set using the Pension Fund data at the rate of 12792 rubles per month. The majority of regions used the federal minimum wage as the basis for defining regional minimum wages. A comparative analysis of regional minimum wages in 2020 and 2021 was carried out for two groups of regions, the regions with regular climate conditions and the regions with special (extreme) climate conditions where the regional coefficient for wages is applied. The analysis shows that in 2021 the minimum wage increased by 5,5% compared to 2020 in most regions. The exception is 11 regions of the Russian Federation, where the minimum wage was set at an increased rate compared to the federal level. The article analyses the ratio of the minimum wage and means wage of all employees in 45 regions of the Russian Federation with normal climate conditions and in 16 regions with extreme climate conditions, where a unified rayon coefficient is set up at the territory of the region. The dynamics of this indicator allows for estimating the trends in wage inequality

Minimum Wage Effects on the Wage Distribution in South Korea

2021 ◽  
Vol 22 (1) ◽  
pp. 1-35
Author(s):  
Jung Hoon Kim ◽  
Young Cheol Jung
Keyword(s):  
South Korea ◽  
Minimum Wage ◽  
Wage Distribution ◽  
Wage Effects
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