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Minimum Wages and Rural and Urban Firm Entry and Exit

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Abstract

The US federal government has not increased the minimum wage since 2009. However, since then, 29 states and the District of Columbia have increased their minimum wage above the federal level. Many studies analyze the effect of the minimum wage on employment with mixed results. To the extent a consensus exists, it is that the minimum wage likely has small negative effects on low-skill employment. Because prevailing wages are lower in rural markets than in urban markets, rural workers and firms should face the largest positive or negative impacts from a commonly applied minimum wage. While Even and MacPherson did find that rural areas had a greater adverse effect from the minimum wage, Godoy and Rich and Winters find that the lowest wage or least populated areas had the least negative, or even positive, employment effects from minimum wage increases.

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  • Yulong Chen & Liyuan Ma & Peter F. Orazem, 2021. "Minimum Wages and Rural and Urban Firm Entry and Exit," Center for Agricultural and Rural Development (CARD) Publications apr-winter-2021-4, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    • Handle: RePEc:ias:cpaper:apr-winter-2021-4
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    References listed on IDEAS

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    1. Xiong, Tao & Zhang, Wendong & Chen, Chen-Ti, 2021. "A Fortune from misfortune: Evidence from hog firms’ stock price responses to China’s African Swine Fever outbreaks," Food Policy, Elsevier, vol. 105(C).
    2. Chad Hart & Lee L. Schulz, 2021. "USDA Outlook for 2021 Shows Healthy Recovery," Center for Agricultural and Rural Development (CARD) Publications apr-winter-2021-5, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    3. Xi He & Dermot J. Hayes & Wendong Zhang, 2021. "Is China's Hog Rebuilding Complete? Reconciling Inventory and Price Data," Center for Agricultural and Rural Development (CARD) Publications apr-winter-2021-2, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    4. Xi He & Dermot J. Hayes & Wendong Zhang, 2021. "China's Agricultural Imports under the Phase One Deal: Is Success Possible?," Center for Agricultural and Rural Development (CARD) Publications 20-pb29, Center for Agricultural and Rural Development (CARD) at Iowa State University.
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    Cited by:

    1. Muriel, Ana & Chugh, Tammana & Prokle, Michael, 2022. "Efficient algorithms for the joint replenishment problem with minimum order quantities," European Journal of Operational Research, Elsevier, vol. 300(1), pages 137-150.

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