S.O. Crofton, W.L. Anderson and E.C. Rawe
American Journal of Economics and Sociology, vol. 68, 2009, p.445-464
This study explores whether higher levels of the real minimum wage have differential effects on high school dropout rates across pupils of varying ethnicities in the USA (Whites, African Americans, Asians and Hispanics). Using a panel of data across Maryland counties and annual observations in 1993-2004, the research found higher real minimum wages to be associated with higher dropout rates for Hispanic pupils, but not for other ethnic groups. Two plausible sociological explanations for these findings are offered:
D. Neumark and W. Wascher
London: MIT Press, 2008
Minimum wages exist in more than one hundred countries, both industrialized and developing. The United States passed a federal minimum wage law in 1938 and has increased the minimum wage and its coverage at irregular intervals ever since; in addition, as of the beginning of 2008, thirty-two states and the District of Columbia had established a minimum wage higher than the federal level. Over the years, the minimum wage has been popular with the public, controversial in the political arena, and the subject of vigorous debate among economists over its costs and benefits. The book offers a comprehensive overview of the evidence on the economic effects of minimum wages. It discusses the effects of minimum wages on employment and hours, the acquisition of skills, the wage and income distributions, longer-term labour market outcomes, prices, and the aggregate economy. Arguing that the usual focus on employment effects is too limiting, it presents a broader, empirically based inquiry that will better inform policymakers about the costs and benefits of the minimum wage. It also argues that minimum wages do not achieve the main goals set forth by their supporters. They reduce employment opportunities for less-skilled workers and tend to reduce their earnings; they are not an effective means of reducing poverty; and they appear to have adverse longer-term effects on wages and earnings, in part by reducing the acquisition of human capital, therefore policymakers should look for other tools to raise the wages of low-skill workers and to provide poor families with an acceptable standard of living.