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Minimum Wages in the 21st Century

Author

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  • Arindrajit Dube
  • Attila S. Lindner

Abstract

This chapter surveys the literature on the impact of minimum wages on low-wage labor markets. We describe and critically review the empirical methods in the new minimum wage literature, particularly those leveraging quasi-experimental variation. We provide a quantitative overview of the most recent evidence on the employment and wage effects of the policy. We also explore emerging research on its impact on other margins, including amenities, other inputs (such as capital and high-skilled workers), firm entry and exit, as well as output prices, demand, profits, and productivity. This approach allows us to present a comprehensive picture of how minimum wage policies affect firms, workers, and labor markets. We also review the evidence on the policy’s impact on wage inequality and income distribution. Finally, we discuss how these effects can vary depending on the economic context and the level of a country’s development.

Suggested Citation

  • Arindrajit Dube & Attila S. Lindner, 2024. "Minimum Wages in the 21st Century," NBER Working Papers 32878, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:32878
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    References listed on IDEAS

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    1. Clemens, Jeffrey & Wither, Michael, 2019. "The minimum wage and the Great Recession: Evidence of effects on the employment and income trajectories of low-skilled workers," Journal of Public Economics, Elsevier, vol. 170(C), pages 53-67.
    2. Chang-Tai Hsieh & Peter J. Klenow, 2009. "Misallocation and Manufacturing TFP in China and India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(4), pages 1403-1448.
    3. Card, David & Krueger, Alan B, 1995. "Time-Series Minimum-Wage Studies: A Meta-analysis," American Economic Review, American Economic Association, vol. 85(2), pages 238-243, May.
    4. Goodman-Bacon, Andrew, 2021. "Difference-in-differences with variation in treatment timing," Journal of Econometrics, Elsevier, vol. 225(2), pages 254-277.
    5. David Neumark, 2024. "The effects of minimum wages on (almost) everything? A review of recent evidence on health and related behaviors," LABOUR, CEIS, vol. 38(1), pages 1-65, March.
    6. Sun, Liyang & Abraham, Sarah, 2021. "Estimating dynamic treatment effects in event studies with heterogeneous treatment effects," Journal of Econometrics, Elsevier, vol. 225(2), pages 175-199.
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    Cited by:

    1. Demir, Gökay, 2024. "Labor Market Frictions and Spillover Effects from Publicly Announced Sectoral Minimum Wages," IZA Discussion Papers 17510, Institute of Labor Economics (IZA).

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    More about this item

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J8 - Labor and Demographic Economics - - Labor Standards

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