Does Higher Minimum Wage Discourage College Enrollment? A Cross-State Empirical Study of the United States

Over the last 20 years, local municipalities have been implementing minimum wage ordinances at an accelerated rate. These local changes, along with state and federal minimum wage increases, are included in the examination of the impact of minimum wage hikes on employment growth of teenagers in the food services and drinking places subsector. While most minimum wage research focuses on employment levels, recent contributions highlight the importance of analyzing employment growth. Following this trend, this study focuses on teenagers within the restaurant industry to test for the impact of minimum wages on inexperienced workers. Using a distributed-lag model, the results show that an increase in a minimum wage reduces employment growth for teenagers within this subsector. The effects of minimum wages within this demographic were most strongly felt in the first three years following an increase in minimum wage. Specifically, the results show that a 10% increase in the minimum wage decreases the employment growth rate by approximately 2.27% over a period of three years.

Do minimum wages improve early life health? Evidence from developing countries

The labor market in Indonesia cannot absorb all of the labor force available, which allows employers to have greater bargaining power over employees. To protect and to increase labor welfare, the government issued minimum wages regulation. Although the purposes of the minimum wage policy were widely accepted, there is great disagreement about whether the minimum wage is effective in achieving its objectives. We found that the minimum wage policy in Indonesia has a positive impact on the average wage. 1 percent of the increase of the minimum wage will increase the average wage by 0.71-0.98 percent. The minimum wage has a negative impact on employment to the working age population ratio. 1 percent of the increase of the minimum wage will decrease the employment to population ratio by 0.62?0.76 percent. The minimum wage only affects total investment. Total investment will decrease 0.09% if the minimum wage increases by 1%.

The current study is inspired by inconclusive empirical findings on the impacts of minimum wage on employment. The majority of past studies have concluded that an increase in the minimum wage negatively impacts employment, despite certain scholars discovering either an insignificant or a positive impact. Hence, this study aims to investigate the impact of the Malaysian minimum wage on the employment opportunities of low-skilled workers. The data are collected annually from 1995 to 2020. An autoregressive distributed lag (ARDL) model is employed to examine the impact of the Malaysian minimum wage on the employment of low-skilled workers. The bounds test method and error correction model (ECM) are subsequently utilised to determine both short- and long-term effects. As a result, the employment of low-skilled labour is found to be positively impacted by the minimum wage, with this impact being statistically significant in both the short and long terms. However, when the interaction variables are included, the effect on the employment of low-skilled workers is negative and insignificant. Furthermore, neither increasing labour productivity nor technological advancement significantly altered the impact of the minimum wage on employment.

Debates on the impact of the minimum wage on the labor market are extensive and complex, highlighting both the potential for income growth and the risk of reducing opportunities for young, low- skilled or inexperienced workers. This article aims to analyze the impact of wage increases on entry-level employment, focusing on the number of employees aged 15-24. The specialized literature outlines this dichotomy between the benefits and challenges of raising the minimum wage, presenting mixed empirical evidence regarding its effects. One viewpoint is that increasing the minimum wage may have a positive effect on employment rates and productivity, in contrast, other research highlights the rising labor costs that discourage employers. This study employs quantitative data covering the period 2014-2023, sourced from National Institute of Statistics, Eurostat and the World Bank. The article applies a log-log regression model estimated using the ordinary least squares (OLS) method, with the dependent variable represented by the number of employed individuals in the 15-24 age group, serving as a proxy for entry-level employment. The independent variables include the youth unemployment rate, the minimum wage (RON), the inflation rate and GDP growth. The econometric model was implemented in Python, enabling the application of log-log regression and the examination of the relationship between minimum wage increases and youth employment. The study’s results suggest a negative elasticity between youth employment and minimum wage growth. Furthermore, the unemployment rate negatively affects youth employment, while inflation rate and GDP growth do not exhibit a statistically significant relationship with the dependent variable. This article contributes to the labor market literature, emphasizing the need to balance the pace of minimum wage increases with policies that support and integrate workers into entry-level positions.

The Effect of the Minimum Wage on the Average Wage in France

This study explores the impact of minimum wages on employment in the formal and informal sectors, as well as on unemployment in Indonesia. With the ongoing debate on the employment impact of minimum wages, by using aggregate provincial panel data from 2001 to 2015, we found that in general, a minimum wage increase lowers formal sector employment and informal sector employment. An increase in minimum wages is also estimated to lower unemployment, as labor participation declined. When divided by gender, this study shows that female workers in the 15–24 age groups bear the largest loss due to a minimum wage increase.

In this study, using data from the 2003–2019 American Time Use Survey (ATUS), we investigate whether changes in the minimum wage have impacted time allocation to children among low-educated mothers and fathers. Relying on geographic and temporal variation in minimum wage changes across US states, we investigate the impacts of minimum wage increases on total time spent at home with children, time spent on primary childcare, and time spent on enriching childcare activities. Our results indicate that an increase in the minimum wage has a large positive effect on the time low-educated mothers spend on primary childcare and enriching time, with no effect among low-educated fathers. We find that Black mothers with less than a high school education see the biggest gains, with an increase in time spent on childcare and time spent on enriching childcare activities by 13.8 and 15.8 min per day, respectively, for each $1 increase in the minimum wage. We also see that single mothers’ time investment is largely unaffected by minimum wage changes, suggesting that there are still considerable income constraints facing these families. Lastly, we see that less educated families with children under the age of 7 significantly increase time spent on primary childcare and enriching time from minimum wage increases, given that they may not have the ability to afford private childcare.

Older adults may receive either or a combination of unpaid family/friend and paid caregiving. The consumption of family/friend and paid caregiving may be sensitive to minimum wage policies. We used data (n = 11,698 unique respondents) from the Health and Retirement Study and a difference-in-differences design to evaluate associations between increases in state minimum wage between 2010 and 2014 and family/friend and paid caregiving consumed by adults age 65+ years. We also examined responses to increases in minimum wage for respondents with dementia or Medicaid beneficiaries. People living in states that increased their minimum wage did not consume substantially different hours of family/friend, paid, or any family/friend or paid caregiving. We did not observe differential responses between increases in minimum wage and hours of family/friend or paid caregiving among people with dementia or Medicaid beneficiaries. Increases in state minimum wage were not associated with changes in caregiving consumed by adults age 65+.

Aim: The research aims to compare the effects of a change in the national minimum wage on the wage distribution in the low and high-paid economic sectors. We assess how wages in different economic sectors react to the minimum wage policy established at the national level. Methodology: We use individual wages and employment characteristics data from the Structure of Earnings Survey in Poland. The methodology applied in this study uses reweighting decomposition based on the non-parametric approach of DiNardo et al. (1996). Results: The results showed that minimum wage growth impacts economic sectors differently. In low-wage sections, minimum wage legislation forced wage growth in the left tail of the wage distribution. Up to the third decile, wage growth was equal to minimum wage growth. Moreover, the results indicated the significantly varying lengths of the spill-over effects across the analysed NACE sections. We found strong spill-over effects in low-wage sections on the entire wage distribution. In the high-wage sector, we did not observe the spill-over effects of a minimum wage increase. Implications and recommendations: Our results are important from both the theoretical and practical points of view as they explain why the literature reports conflicting evidence regarding the impact of minimum wage changes on wage distribution and the presence of the spill-over effects. Our results indicate that the most important reason is that national minimum wage increases affect wages in different parts of the economy to different extents, and thus are beneficial for the policymakers. They show that from the point of view of the policy of compressing wage inequalities, the effects of raising the minimum wage turned out to be not so obvious. Originality/value: According to our knowledge, this is the first study on the impact of minimum wage on wage distribution at the NACE economic section level.

Smoking before and during pregnancy has long-lasting adverse effects for children's health and development. Financial stress is an important risk factor for maternal smoking, but there is little evidence on how economic policies affect tobacco use. We examined whether increases in state minimum wages had an impact on maternal smoking and cessation. This was a secondary analysis of cross-sectional surveillance data from 46 states between 2004 and 2019. Our analysis sample included women without college education. Outcomes were use of cigarettes in the 3 months before pregnancy, the last 3 months of pregnancy, and in the postpartum period, as well as cessation of smoking during and after pregnancy. For the main analysis, a two-way fixed effects difference-in-differences analysis was used to estimate the effects of state-level minimum wage policies on outcomes, adjusting for individual covariates (age, race and ethnicity, marital status, parity, education and month of birth), state-level economic and tobacco policies, and state and year fixed effects. We also explored robustness to de Chaisemartin & D'Haultfœuille (dCDH)'s heterogeneity-robust alternative estimator. Subgroup analysis examined heterogeneous impacts by race and ethnicity, age, marital status and pregnancy intention. We tested differences by subgroup using interaction models and testing the joint null hypothesis of coefficients. We used the Benjamini-Hochberg procedure to adjust p values for multiple comparisons. The study analysed 421 884 women of whom 28% smoked in the 3 months prior to pregnancy. A 10% increase in the minimum wage was associated with a 0.75 (95% CI -1.32 to -0.19) percentage point decrease in the probability of smoking before pregnancy. Associations were strongest for women who were American Indian/Alaska Native, non-Hispanic White, married and had an unintended pregnancy. Two-way fixed effect results were consistent when using the dCDH estimator. There were no significant associations between minimum wages and smoking during pregnancy or postpartum, or on smoking cessation. The conclusions of the analysis do not change when adjusted for multiple hypothesis testing. Estimates suggest that an increase from the current federal minimum wage of US$7.25-US$14 would be associated with a 17% decrease in smoking prior to pregnancy in a demographic group that is disproportionately affected by poor health outcomes.

The impact of minimum wage increases on employment has been extensively examined with mixed results. We extend the literature by hypothesizing and showing a differential impact of state-level minimum wage increases on nonprofit organizations as opposed to for-profit organizations. While we find that increases in minimum wages reduce employment growth in both types of organizations, this decrease is substantially larger for nonprofit organizations. We also find that investment in automation, that is, information technology, rises in nonprofits postminimum wage increase, consistent with the substitution of capital for labor. Minimum wage increases also increase the likelihood of nonprofit exit. JEL: J38, J68, L

Unintended workplace safety consequences of minimum wages

Corporate social responsibility (CSR) has been widely discussed. However, the existing literature does not delve into the theoretical mechanism to show how companies adjust their CSR in the face of minimum wage increases. This may be due to the lack of a theoretical framework that clarifies the relationship between minimum wage increases and CSR adjustments. The objectives of this study is to fill this gap by investigating the impact of minimum wage increases on CSR, employing both cost stickiness and optimal distinctiveness theories. We use the data from the CSMAR database, the Human Resources and Social Security Administration, and Hexun rating system. The subject of this study is China’s A-share listed companies during 2010–2020. This study employs fixed-effects models for a panel data. The findings reveal that minimum wage increases are significantly associated with a reduction in both strategic CSR and responsive CSR. Notably, the decrease in responsive CSR outweighs that of strategic CSR. Furthermore, our results indicate that customer concentration or CSR sensitivity significantly moderates this relationship. More particularly, firms with higher customer concentration are less responsive to minimum wage increases in their CSR activities. Firms with higher sensitivity in CSR are more likely to mitigate the reducing effect of the minimum wage on CSR. By revealing how minimum wage increases affect CSR and its economic consequences, our study provides scientific recommendations for policymakers to measure the impact of minimum wage policies at the firm level.

We examine the impact of minimum wage increases on the overall self-reported health and subjective well-being of low-skilled workers using the Gallup World Poll from 2009 to 2020. We identify effects using within-country changes over time and cross-country variations in the timing and intensity of minimum wage increases across 87 countries. Our findings suggest that minimum wage increases benefit health and certain dimensions of subjective well-being. Specifically, we estimate a range of specifications and find that a 10 percent increase in the minimum wage leads to an increase in self-reported health ranging from 0% to 1% and an increase in satisfaction with the standard of living between 1% and 6%, at the outcome means. Minimum wage increases are linked to higher incomes, a lower likelihood of overtime work, enhanced social interactions, and more positive daily experiences. These benefits are especially significant in countries with stronger rule of law, among male workers, and for individuals in nations with free and universal healthcare access. A series of sensitivity and placebo tests confirm the robustness of these findings.