The new Census study on the minimum wage

By Kevin Rins and John Voorheis, this is one of the most thorough and detailed studies to date.  Here is one excerpt:

…we find that raising the minimum wage increases earnings growth at the bottom of the distribution, and those effects persist and indeed grow in magnitude over several years. This finding is robust to a variety of specifications, including alternatives commonly used in the literature on employment effects of the minimum wage.

How does their work differ from other treatments?:

Most public datasets commonly used in the minimum wage literature have limited ability to address how earnings growth responds to minimum wage increases because they are either composed of repeated cross-sections or have panel dimensions that cover relatively limited periods of time.

My personal view still is that the next generation of firms likely will create fewer jobs, and aggregate output and employment will be lower.  I would rather look for measures that boost both efficiency and equity, and not just along the shorter time horizons.  But on the pro-minimum wage side, you should consider that those immediately affected by the wage hike do seem better off, and their higher income in the meantime may itself bring some efficiency-enhancing gains.


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