Publication Date
11-11-2020
Award Type
Winner
Dissertation Advisor
Bruno Crépon
Abstract
This dissertation studies the redistributive effects of minimum wage policies. The first chapter provides the first causal evidence of how the minimum wage has affected the historical evolution of racial inequality in the United States. It shows that the extension of the federal minimum wage to new sectors of the economy in 1967 can explain more than 20% of the decline in the racial earnings gap observed during the Civil Rights Era -- the only period of time (post World-War II) during which racial inequality fell in the United States. This effect is as large as previously studied policies and economic factors, such as the improvement in schooling for African-Americans or federal anti-discrimination policies. The second chapter estimates the pass-through of minimum wage increases into prices of US grocery stores, using high-frequency scanner level data. A 10% minimum wage hike translates into a 0.2% increase in grocery prices between 2001 and 2012. This magnitude is consistent with a full pass-through of cost increases into consumer prices. Depending on household income, grocery price increases offset between 3 and 12% of the nominal income gains. The third chapter estimates a calibrated labor market model to analyze the likely effects of a 15 dollars federal minimum wage by 2024. It compares employment numbers if the policy were adopted to employment numbers if the policy had not been adopted using a wide range of well-identified elasticities.
Link to dissertation full text