Effects of the Minimum Wage on Employment Dynamics

Jonathan Meer, Jeremy West

NBER Working Paper No. 19262
Issued in August 2013
NBER Program(s):   LS   PE

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.

You may purchase this paper on-line in .pdf format from ($5) for electronic delivery.

Information about Free Papers

You should expect a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.


This paper was revised on January 26, 2015

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w19262

Users who downloaded this paper also downloaded these:
Autor, Manning, and Smith w16533 The Contribution of the Minimum Wage to U.S. Wage Inequality over Three Decades: A Reassessment
Brown, Gilroy, and Kohen w0846 The Effect of the Minimum Wage on Employment and Unemployment: A Survey
Neumark and Wascher w6127 Do Minimum Wages Fight Poverty?
Dickens, Machin, and Manning w4742 The Effects of Minimum Wages on Employment: Theory and Evidence from the US
Christiano, Eichenbaum, and Trabandt w19265 Unemployment and Business Cycles
NBER Videos

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

Contact Us