NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Federal Minimum Wage, Inflation, and Employment

John F. Boschen, Herschel I. Grossman

NBER Working Paper No. 652 (Also Reprint No. r0242)
Issued in April 1981
NBER Program(s):   EFG   LS

This study investigates the effects of Federal minimum wage policy on mini-mum wage employment, aggregate employment, and average wage rates. The theoretical analysis focuses on the possible effect of the Federal minimum wage in constraining wages and employment in a subset of labor markets, on the possible responses of labor suppliers to these constraints, and on the possible role of the policy of presetting the nominal minimum wage in making monetary policy nonneutral. Among the elements of the theoretical framework that are both distinctive and important are the assumptions that both the demands and supplies of labor services in the subset of constrained markets depend on the expected relative minimum wage in the near and distant future, as well as on the current relative minimum wage and on past levels of employment, and that the relevant expectations of both workers and employers about relative minimum wages are "rational."

download in pdf format
   (437 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w0652

Published: Boschen, John F. and Grossman, Herschel I. "The Federal Minimum Wage, Employment, and Inflation. Report of the Minimum Wage Study Commission, Vol. VI,(June 1981), pp. 19-43.

Users who downloaded this paper also downloaded* these:
Mincer w0039 Unemployment Effects of Minimum Wages
Neumark and Wascher w12663 Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research
Brown, Gilroy, and Kohen w0846 The Effect of the Minimum Wage on Employment and Unemployment: A Survey
Boschen and Grossman w0812 Employment Effects of the Federal Minimum Wage
Rebitzer and Taylor w3877 The Consequences of Minimum Wage Laws: Some New Theoretical Ideas
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us