scholarly journals The Effects of Minimum Wages Throughout the Wage Distribution

10.3386/w7519 ◽  
2000 ◽  
Author(s):  
David Neumark ◽  
Mark Schweitzer ◽  
William Wascher
Keyword(s):  
Minimum Wages ◽  
Wage Distribution

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 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.

Employment effects of union-bargained minimum wages

2015 ◽  
Vol 36 (5) ◽  
pp. 694-710 ◽  
Author(s):  
Per Skedinger
Keyword(s):  
Design Methodology ◽  
Minimum Wages ◽  
Wage Distribution ◽  
Collective Agreement ◽  
Content Type ◽  
Employment Effects ◽  
Employment Transitions ◽  
Part Time ◽  
Econometric Approach ◽  
Practical Implications

Purpose – The purpose of this paper is to examine the effects of collectively agreed increases in minimum wages for manual workers on employment transitions and hours. Design/methodology/approach – The econometric approach relies on the identification of workers affected by minimum wage changes, depending on their position in the wage distribution and contrasts outcomes for these workers to those for unaffected workers, with slightly higher wages. Findings – The analysis suggests that separations increase as minimum wages increase and that substitution between worker groups in response to changes in minimum wages is important in retail. In general, though, hours do not change much as minimum wages increase. Research limitations/implications – Analyses that deal with employment consequences of increasing minimum wages but disregard hours may exaggerate the overall decline in employment to the extent that job losses are concentrated among low-paid, part-time workers. Practical implications – With union-bargained minimum wages, unions and employers need to carefully consider the effects of increasing rates on employment. Social implications – The findings that there is a trade-off between higher wages among the low-paid and employment loss and that employment to some extent is reshuffled between individuals should be important from a welfare perspective. Originality/value – The literature on employment effects of minimum wages is large, but very few studies are concerned with union-bargained minimum wages. The assumptions of the econometric model are tested in a novel way by imposing fictitious minimum wages on lower-level non-manuals in the same industry, with turnover characteristics similar to those of manuals but covered by a different collective agreement with non-binding actual minimum wages.

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)

Left Government, Policy, and Corporatism: Explaining the Influence of Partisanship on Inequality

2008 ◽  
Vol 60 (3) ◽  
pp. 349-389 ◽  
Author(s):  
David Rueda
Keyword(s):  
Welfare State ◽  
Earnings Inequality ◽  
Minimum Wages ◽  
Wage Distribution ◽  
Significant Determinant ◽  
Mediating Role ◽  
Government Employment ◽  
The Relationship ◽  
The Welfare State

The author argues that to understand the relationship between partisan government and equality two fundamental things need to be done: separate the effects of partisanship on policy and of policy on the economy; and assess the influence of government partisanship once the mediating role of corporatism is accounted for. The main goal of this article is to explore the relationship between government partisanship, policy, and inequality at the lower half of the wage distribution. The analysis is motivated by a puzzling finding in previous work: the absence of government partisanship effects on earnings inequality. The author focuses on the role of three different policies: government employment, the generosity of the welfare state, and minimum wages. The results show that government employment is a most significant determinant of inequality (although it is affected by left government only when corporatism is low). They also demonstrate that welfare state generosity does not affect inequality and, in turn, is not associated with left government. Finally, they reveal that the effect of government partisanship on minimum wages and of minimum wages on inequality is completely conditional on the levels of corporatism (these effects are only present when corporatism is low). The author explains why specific policies do or do not affect earnings inequality and also why corporatism mitigates or magnifies the influence of government partisanship. By explicitly exploring the determinants of policy and earnings inequality, the article represents an important contribution to our understanding of how governments can promote redistribution.

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.

Wage Bargaining and Minimum Wages in a Search–Matching Model

2021 ◽  
Author(s):  
Marcus Dittrich
Keyword(s):  
Minimum Wage ◽  
Spillover Effects ◽  
Theoretical Explanation ◽  
Wage Bargaining ◽  
Minimum Wages ◽  
Wage Distribution ◽  
Nash Solution ◽  
Bargaining Solution ◽  
Matching Model ◽  
The Nash Solution

In this paper, we analyze the introduction of a nonbinding minimum wage in a search–matching model with wage bargaining. Applying the Kalai–Smorodinsky bargaining solution instead of the commonly applied Nash solution, we provide a theoretical explanation for spillover effects of minimum wages on other wages higher up in the wage distribution. The labor market equilibrium in the Kalai–Smorodinsky solution with a minimum wage is characterized by lower market tightness, a higher unemployment rate, and lower vacancy rate than the equilibrium in the Nash solution. Moreover, we show that a nonbinding minimum wage can increase social welfare.

scholarly journals Minimum wages and the wage distribution in Estonia

2018 ◽  
Vol 50 (49) ◽  
pp. 5253-5268 ◽  
Author(s):  
Simona Ferraro ◽  
Jaanika Meriküll ◽  
Karsten Staehr
Keyword(s):  
Minimum Wages ◽  
Wage Distribution
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