On the Robustness of Minimum Wage Effects: Geographically-Disparate Trends and Job Growth Equations

Addison, J.T.; Blackburn, M.L.; Cotti, C.D.

Abstract

Recent attempts to incorporate spatial heterogeneity in minimum-wage employment models have been targeted for using overly simplistic trend controls and for neglecting the potential impact of wage minima on employment growth. This paper investigates whether such considerations call into question findings of statistically insignificant employment effects reported in the literature for an archetypal low-wage sector in the United States: restaurants and bars. Understanding this relationship goes to the heart of the policy debate surrounding minimum wages and, hence, is critical to investigate carefully. Our results conclude that a focus on employment levels is appropriate for this sector and, further, that the deployment of nonlinear trend controls does not dislodge prior research which finds weak support for the existence of adverse minimum-wage employment effects on employment.

Citation

Addison, J., Blackburn, M., & Cotti, C. (2015). On the Robustness of Minimum Wage Effects: Geographically-Disparate Trends and Job Growth Equations. IZA Journal of Labor Economics, 4, Article 24. https://doi.org/10.1186/s40172-015-0039-z

• Journal Article Type: Article
• Acceptance Date: Nov 23, 2015
• Online Publication Date: Dec 29, 2015
• Publication Date: Dec 29, 2015
• Deposit Date: Nov 17, 2015
• Publicly Available Date: Nov 19, 2015
• Journal: IZA Journal of Labor Economics
• Electronic ISSN: 2193-8997
• Publisher: Sciendo
• Peer Reviewed: Peer Reviewed
• Volume: 4
• Article Number: 24
• DOI: https://doi.org/10.1186/s40172-015-0039-z
• Keywords: Minimum wages, Employment, Employment change, Spatial controls.
• Public URL: https://durham-repository.worktribe.com/output/1426741