The Econometrics and Economics of the Employment Effects of Minimum Wages: Getting from Known Unknowns to Known Knowns
I discuss the econometrics and the economics of past research on the effects of minimum wages on employment in the United States. My intent is to try to identify key questions raised in the recent literature, and some from the earlier literature, which I think hold the most promise for understanding the conflicting evidence and arriving at a more definitive answer about the employment effects of minimum wages. My secondary goal is to discuss how we can narrow the range of uncertainty about the likely effects of the large minimum wage increases becoming more prevalent in the United States. I discuss some insights from both theory and past evidence that may be informative about the effects of high minimum wages, and try to emphasize what research can be done now and in the near future to provide useful evidence to policymakers on the results of the coming high minimum wage experiment, whether in the United States or in other countries.
This paper was given as the keynote address for the EVA-MIN conference “Evaluation of Minimum Wages” at DIW Berlin on July 4-5, 2018 and was prepared for the special issue on Minimum Wages in the German Economic Review. I am grateful to William Wascher for long-standing research collaboration, and to Jeff Clemens, Kyle Colangelo, Matthew Harding, Jonathan Meer, Joan Monras, David Powell, Carsten Schroeder, Evan Totty, and Weilong Zhang for helpful comments and discussions of this paper. Some of the material in this paper is covered, in much less detail, in Neumark (2018). The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.
David Neumark, 2019. "The Econometrics and Economics of the Employment Effects of Minimum Wages: Getting from Known Unknowns to Known Knowns," German Economic Review, vol 20(3), pages 293-329. citation courtesy of