Year

2015

Series

Upjohn Institute working paper ; 15-233

**Published Version**

Journal of Human Resources 51(2) (2016): 500-522. DOI:10.3368/jhr.51.2.0414-6298R1

DOI

10.17848/wp15-233

Abstract

The voluminous literature on minimum wages offers little consensus on the extent to which a wage floor impacts employment. We argue that the minimum wage will impact employment over time, through changes in growth rather than an immediate drop in relative employment levels. We conduct simulations showing that commonly-used specifications in this literature, especially those that include state-specific time trends, will not accurately capture these effects. Using three separate state panels of administrative employment data, we find that the minimum wage reduces job growth over a period of several years. These effects are most pronounced for younger workers and in industries with a higher proportion of low-wage workers.

Issue Date

January 2015

Sponsorship

W.E. Upjohn Institute for Employment Research, Early Career Research Award grant 13-141-05

Subject Areas

LABOR MARKET ISSUES; Wages, health insurance and other benefits; Minimum wage

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Citation

Meer, Jonathan, and Jeremy West. 2015. "Effects of the Minimum Wage on Employment Dynamics." Upjohn Institute Working Paper 15-233. Kalamazoo, MI: W.E. Upjohn Institute for Employment Research. http://dx.doi.org/10.17848/wp15-233