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Minimum wage careers?

Author

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  • William J. Carrington
  • Bruce Fallick

Abstract

This paper investigates the extent to which people spend careers on minimum wage jobs. We find that a small but non-trivial number of NLSY respondents spend 25%, 50%, or even 75% of the first ten years of their career on minimum or near-minimum wage jobs. Workers with these minimum wage careers tend to be drawn from groups such as women, blacks, and the less-educated that are generally overrepresented in the low-wage population. The results indicate that lifetime incomes of some workers may be supported by a minimum wage. At the same time, these same groups would be disproportionately affected by any minimum wage-induced disemployment. The results suggest that minimum wage legislation has non-negligible effects on the lifetime opportunities of a significant minority of workers.

Suggested Citation

  • William J. Carrington & Bruce Fallick, 1999. "Minimum wage careers?," Finance and Economics Discussion Series 1999-46, Board of Governors of the Federal Reserve System (U.S.).
    • Handle: RePEc:fip:fedgfe:1999-46
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    References listed on IDEAS

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    1. David Neumark & William L. Wascher, 1993. "Minimum wage effects on employment and school enrollment: evidence from policy variation in schooling quality and compulsory schooling laws," Working Paper Series / Economic Activity Section 133, Board of Governors of the Federal Reserve System (U.S.).
    2. Johnson, William R & Browning, Edgar K, 1983. "The Distributional and Efficiency Effects of Increasing the Minimum Wage: A Simulation," American Economic Review, American Economic Association, vol. 73(1), pages 204-211, March.
    3. Thomas MaCurdy & Thomas Mroz & R. Mark Gritz, 1998. "An Evaluation of the National Longitudinal Survey on Youth," Journal of Human Resources, University of Wisconsin Press, vol. 33(2), pages 345-436.
    4. Behrman, Jere R & Sickles, Robin C & Taubman, Paul, 1983. "The Impact of Minimum Wages on the Distributions of Earnings for Major Race-Sex Groups: A Dynamic Analysis," American Economic Review, American Economic Association, vol. 73(4), pages 766-778, September.
    5. Richard V. Burkhauser & T. Aldrich Finegan, 1989. "The minimum wage and the poor: The end of a relationship," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 8(1), pages 53-71.
    6. Ronald G. Ehrenberg & Alan J. Marcus, 1982. "Minimum Wages and Teenagers' Enrollment-Employment Outcomes: A Multinomial Logit Model," Journal of Human Resources, University of Wisconsin Press, vol. 17(1), pages 39-58.
    7. Ralph E. Smith & Bruce Vavrichek, 1992. "The Wage Mobility of Minimum Wage Workers," ILR Review, Cornell University, ILR School, vol. 46(1), pages 82-88, October.
    8. Jean Baldwin Grossman, 1983. "The Impact of the Minimum Wage on Other Wages," Journal of Human Resources, University of Wisconsin Press, vol. 18(3), pages 359-378.
    9. Hashimoto, Masanori, 1982. "Minimum Wage Effects on Training on the Job," American Economic Review, American Economic Association, vol. 72(5), pages 1070-1087, December.
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    Cited by:

    1. Neumark, David & Wascher, William, 2003. "Minimum wages and skill acquisition: another look at schooling effects," Economics of Education Review, Elsevier, vol. 22(1), pages 1-10, February.
    2. David Neumark & William Wascher, 1994. "Minimum Wage Effects and Low-Wage Labor Markets: A Disequilibrium Approach," NBER Working Papers 4617, National Bureau of Economic Research, Inc.
    3. Abowd, John M. & Kramarz, Francis & Margolis, David N. & Philippon, Thomas, 2000. "The Tail of Two Countries: Minimum Wages and Employment in France and the United States," IZA Discussion Papers 203, Institute of Labor Economics (IZA).

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    Keywords

    Minimum wage; Labor supply;

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