![Economics Detective Radio artwork](https://is2-ssl.mzstatic.com/image/thumb/Podcasts113/v4/7d/9b/58/7d9b58a8-dc98-bdf6-2842-d853f169b672/mza_2056922084173616894.jpg/100x100bb.jpg)
The Minimum Wage and Labour Market Dynamics with Jonathan Meer
Economics Detective Radio
English - December 14, 2018 17:38 - 53 minutes - 62 MB - ★★★★★ - 61 ratingsSocial Sciences Science News finance economics education hayek history macroeconomics microeconomics mises money science Homepage Download Apple Podcasts Google Podcasts Overcast Castro Pocket Casts RSS feed
Previous Episode: Seigniorage in the Civil War South with Bryan Cutsinger
Next Episode: Rent Control and the Housing Debate with Ash Navabi
Today's guest is Jonathan Meer of Texas A&M. We discuss his work on the minimum wage.
The voluminous literature on minimum wages offers little consensus on the extent to which a wage floor impacts employment. For both theoretical and econometric reasons, we argue that the effect of the minimum wage should be more apparent in new employment growth than in employment levels. In addition, we conduct a simulation showing that the common practice of including state-specific time trends will attenuate the measured effects of the minimum wage on employment if the true effect is in fact on the rate of job growth. Using three separate state panels of administrative employment data, we find that the minimum wage reduces net job growth, primarily through its effect on job creation by expanding establishments. These effects are most pronounced for younger workers and in industries with a higher proportion of low-wage workers.