Table 4 Key early, recent, and summary estimates of minimum wage effects on unskilled employment
From: Policy levers to increase jobs and increase income from work after the Great Recession
Authors | Employment elasticity and groups studied | Data/approach |
|---|---|---|
Early estimates/summary | ||
Brown et al. (1982) | −0.1 to −0.3, mostly for teenagers, −0.1 to −0.2 for 16–24-year-olds | Aggregate time series |
Recent summaries/meta-analyses | ||
Neumark and Wascher (2007) | Many estimates in the range of −0.1 to −0.2 for teens and other low-skilled groups; sometimes larger negative when focusing more specifically on least-skilled groups | Narrative survey of many papers |
Doucouliagos and Stanley (2009) | Average across studies of −0.19 for teens and low-skilled; 0.04 using their correction for publication bias | Meta-analysis, average across many studies |
Belman and Wolfson (2014) | Range of estimates from averaging across studies for teens and low-skilled, −0.03 to −0.10; when weighted inversely by precision, −0.03 to −0.10; with corrections for publication bias, −0.02 to −0.06 | Meta-analysis, average across many studies |
Recent estimates | ||
  Geographically-proximate changes | ||
Dube et al. (2010) | Near zero for teens and restaurant workers | Paired counties on opposite sides of state borders |
Allegretto, Dube, and Reich (2011) | Near zero for teens | States compared only to those in same Census division |
Gittings and Schmutte: Getting handcuffs on an octopus: minimum wages, employment, and turnover, Unpublished | Near zero for teens; larger negative elasticities in markets with short non-employment durations (−0.1 to −0.98) and smaller positive elasticities in markets with long non-employment durations (0.2 to 0.46) | States compared only to those in same Census division |
Addison et al. (2013) | Varying sign, more negative, generally insignificant for restaurant workers and teens; stronger negative at the height of Great Recession (−0.34) | Similar methods to Dube et al. (2010) and Allegretto et al. (2011), restricted to the 2005–2010 period |
  Other approaches | ||
−0.14/−0.15 for teens, −0.05/−0.06 for restaurant workers | States compared to data-driven choice of controls (synthetic control), and state panel data | |
Totty (2014) | Most near zero, some near −0.04 for restaurant workers; 0 to −0.15 for teens | States compared to data-driven choice of controls (factor model) |
Powell: Synthetic control estimation beyond case studies: does the minimum wage decrease teen employment?, Unpublished | −0.10 | States compared to data-driven choice of controls (synthetic controls, estimated simultaneously with employment effect) |
Baskaya and Rubinstein: Using federal minimum wage effects to identify the impact of minimum wages on employment and earnings across U.S. states, unpublished | −0.5 for teens | States, using federally induced variation as instrumental variable |
Clemens and Wither (2014) | Appx. −0.67, for those directly affected by minimum wage increase | Targeted/affected workers versus other low-wage workers in states affected by federal increases |
Thompson (2009) | −0.3 (for teen employment share) | Low-wage counties vs. higher-wage counties in states |
Liu et al.: Impact of the minimum wage on youth labor markets, forthcoming | −0.17 (14–18-year-olds) | Comparisons within BEA Economic Areas (EA) that cross state lines, with controls for EA-specific shocks |
Meer and West: Effects of the minimum wage on employment dynamics, forthcoming | Long-run elasticity for overall employment of −0.07, in many cases concentrated in low-wage industries | State panel data, long differences with lagged effects |