Welfare Reform on the Web (October 1999): Minimum Wage - Overseas

DO MINIMUM WAGE HIKES REDUCE EMPLOYMENT? STATE-LEVEL EVIDENCE FROM THE LOW-WAGE RETAIL SECTOR.

M. D. Partridge and J. S. Partridge

Journal of Labor Research, vol. 20, 1999, p.393-413

Empirical analysis considers US state level data from the later 1980s, when many states raised their minimum wages above the federal level. Results suggest that an increased minimum wage reduces retail employment in conformity with the standard labour market model. Further analysis indicates that minimum wage hikes also adversely affected total state employment growth, which implies that state minimum wage policies can affect firm and household location.