Employment Effects of the Federal Minimum Wage / John F. Boschen, Herschel I. Grossman.

Format:

Book

Author/Creator:

Boschen, John F.

Contributor:

National Bureau of Economic Research.

Grossman, Herschel I.

Series:

Working Paper Series (National Bureau of Economic Research) no. w0812.

NBER working paper series no. w0812

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1981.

Summary:

This paper describes an empirical study of the effects of federal minimum wage policy on aggregate employment, on the employment of various demographic groups, and on employment in low-wage industries. The analytical framework permits separate testing both for direct employment effects of the level and coverage of the minimum wage and for indirect employment effects resulting from a possible role for the minimum wage as a cause of monetary nonneutrality. Another innovation in this study is the inclusion of rational expectations of expected future relative minimum wages as determinants of the demands and supplies of labor services. The study finds that minimum-wage policy seems not to affect aggregate employment or average wages either directly or indirectly. Minimum-wage policy, however, has large and statistically significant effects on the industrial and demographic composition of employment, with employment decreasing in certain low-wage industries and for teenagers and for young men but increasing for young women and for adults. A major part of these effects are associated with anticipated future changes in the level of the minimum wage.

Notes:

Print version record

December 1981.