NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Doruk Cengiz

Department of Economics
Crotty Hall
412 North Pleasant Street
University of Massachusetts
Amherst, MA 01002

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Institutional Affiliation: University of Massachusetts at Amherst

NBER Working Papers and Publications

January 2019The Effect of Minimum Wages on Low-Wage Jobs: Evidence from the United States Using a Bunching Estimator
with Arindrajit Dube, Attila Lindner, Ben Zipperer: w25434
We propose a novel method that infers the employment effect of a minimum wage increase by comparing the number of excess jobs paying at or slightly above the new minimum wage to the missing jobs paying below it. To implement our approach, we estimate the effect of the minimum wage on the frequency distribution of hourly wages using 138 prominent state-level minimum wage changes between 1979 and 2016. We find that the overall number of low-wage jobs remained essentially unchanged over five years following the increase. At the same time, the direct effect of the minimum wage on average earnings was amplified by modest wage spillovers at the bottom of the wage distribution. Our estimates by detailed demographic groups show that the lack of job loss is not explained by labor-labor substitution...
 
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