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Employment Effects of the 2009 Minimum Wage Increase: Evidence from State Comparisons of At-Risk Workers

Author

Listed:
  • Saul D. Hoffman

    (Department of Economics,University of Delaware)

  • Chenglong Ke

    (University of Delaware)

Abstract

In July, 2009, the U.S. Federal minimum wage was increased from $6.55 to $7.25. Individuals in some states were unaffected by this increase, since the state minimum wage already exceeded $7.25 and the state minimum was not increased further. We use this variation, as well as variation in the actual amount of the increase, to make comparisons of the employment of “at-risk” workers across states with their peers and within states with workers arguably unaffected by the increase. Our data come from the 2009 CPS, four and five months before and after the increase. We find some evidence that the employment of some at-risk demographic groups declined as a result of the minimum wage increase, but the impacts are not statistically significant. We also find that the employment changes were not responsive to the actual amount of the increase.

Suggested Citation

  • Saul D. Hoffman & Chenglong Ke, 2010. "Employment Effects of the 2009 Minimum Wage Increase: Evidence from State Comparisons of At-Risk Workers," Working Papers 10-07, University of Delaware, Department of Economics.
    • Handle: RePEc:dlw:wpaper:10-07.
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    File URL: http://graduate.lerner.udel.edu/sites/default/files/ECON/PDFs/RePEc/dlw/WorkingPapers/2010/UDWP2010-07.pdf
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    References listed on IDEAS

    as
    1. Lawrence Katz & Alan Krueger, 1992. "The Effect of the Minimum Wage on the Fast Food Industry," Working Papers 678, Princeton University, Department of Economics, Industrial Relations Section..
    2. Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-793, September.
    3. Lawrence F. Katz & Alan B. Krueger, 1992. "The Effect of the Minimum Wage on the Fast-Food Industry," ILR Review, Cornell University, ILR School, vol. 46(1), pages 6-21, October.
    4. Thomas R. Michl, 2000. "Can Rescheduling Explain the New Jersey Minimum Wage Studies?," Eastern Economic Journal, Eastern Economic Association, vol. 26(3), pages 265-276, Summer.
    5. Saul D. Hoffman & Diane Trace, 2007. "NJ and PA Once Again: What Happened to Employment When the PA-NJ Minimum Wage Differential Disappeared?," Working Papers 07-08, University of Delaware, Department of Economics.
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    Cited by:

    1. Jeffrey Clemens, 2015. "The Minimum Wage and the Great Recession: Evidence from the Current Population Survey," NBER Working Papers 21830, National Bureau of Economic Research, Inc.
    2. John T. Addison & McKinley L. Blackburn & Chad D. Cotti, 2012. "The Effect of Recent Increases in the U.S. Minimum Wage: Results from Three Data Sources," Working Paper series 58_12, Rimini Centre for Economic Analysis.

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    More about this item

    Keywords

    minimum wage;

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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