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Dropouts Need Not Apply? The Minimum Wage and Skill Upgrading

Jeffrey Clemens, Lisa B. Kahn, Jonathan Meer

NBER Working Paper No. 27090
Issued in May 2020
NBER Program(s):Labor Studies, Public Economics

We explore whether minimum wage increases result in substitution from lower-skilled to slightly higher-skilled labor. Using 2011-2016 American Community Survey data (ACS), we show that workers employed in low-wage occupations are older and more likely to have a high school diploma following recent statutory minimum wage increases. To better understand the role of firms, we examine the Burning Glass vacancy data. We find increases in a high school diploma requirement following minimum wage hikes, consistent with our ACS evidence on stocks of employed workers. We see substantial adjustments to requirements both within and across firms.

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Document Object Identifier (DOI): 10.3386/w27090

 
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