The Contribution of the Minimum Wage to U.S. Wage Inequality Over Three Decades: A Reassessment

By David H. Autor, Alan Manning, Christopher L. Smith. 2010

564 citations recorded by the source corpus.

We reassess the effect of minimum wages on US earnings inequality using additional decades of data and an IV strategy that addresses potential biases in prior work. We find that the minimum wage reduces inequality in the lower tail of the wage distribution, though by substantially less than previous estimates, suggesting that rising lower tail inequality after 1980 primarily reflects underlying wage structure changes rather than an unmasking of latent inequality. These wage effects extend to percentiles where the minimum is nominally nonbinding, implying spillovers. We are unable to reject that these spillovers are due to reporting artifacts, however. (JEL J22, J31, J38, K31)

Subfields: Economics and Econometrics, General Health Professions, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/c1913f4d05f4ffdf0eeb497a492baa9f5aa8117a

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Citations in the corpus

The Effect of Minimum Wages on Low-Wage Jobs* (2019, unknown): “We assess the misreporting in the CPS and in the administrative data by implementing Autor et al. (2016). To alleviate the effect of rounding of hours worked information in the administrative data we re-center the $0.”
Minimum Wages and Racial Inequality* (2020, background): “The literature also studies the effects on wage inequality (see, e.g., Blackburn et al., 1990; DiNardo et al., 1996; Lee, 1999; Autor et al., 2016) and family incomes (Gramlich, 1976; congressional budget office, 2014; Dube, 2017).”
NBER WORKING PAPER SERIES THE LABOR MARKET EFFECTS OF A REFUGEE WAVE: APPLYING THE SYNTHETIC CONTROL METHOD TO THE MARIEL BOATLIFT (2015, methodology): “In all figures, we adopt the convention to call “1979-Pre” the data relative to the last observation before the Mariel Boatlift and “1981-Post” the first data point certainly after all Mariel Cubans had arrived.(8) The 1980 data in the May-ORG are collected year round and include pre- and post-Boatl”
Who Pays for the Minimum Wage? (2019, background): “…wage in the non-tradable sector than in the tradable sector can push up wages relatively more where it will generate more modest disemployment effects. using difference-in-differences style estimators (see, e.g., Cengiz et al. forthcoming; Brochu et al. 2017; Autor, Manning, and Smith 2016).”
The determinants of income inequality in OECD countries (2018, background): “(2012) and Autor et al. (2015), who found that minimum wages have little effect on employment, but do have impacts on wage inequality, in particular in the UK and in the USA during the 1990s and 2000s.”
Reallocation Effects of the Minimum Wage (2021, result): “In line with existing evidence (e.g., Brochu et al. 2015; Autor, Manning, and Smith 2016; Cengiz et al. 2019), the findings by the German Minimum Wage Commission (2018) further suggest spillover effects of the minimum wage on jobs paying up to €11 but not beyond.”
Minimum Wages and the Distribution of Family Incomes (2018, unknown): “Table 4: Minimum wage elasticities for proportions under alternative income-to-needs cuto s Income-to-needs cuto (1) (2) (3) (4) (5) (6) (7) (8) 0.”
Communities in Action: Pathways to Health Equity (2017, background): “Declines in real minimum wages have been found to contribute to income inequality, particularly for women, between 1979 and 2012 (Autor et al., 2016).”
Skills, education, and the rise of earnings inequality among the “other 99 percent” (2014, background): “minimum wage (7), the sharp drops in non-college employment opportunities in production, clerical and administrative support positions stemming from automation, the steep rise in international competition from the developing world, the”
Tax Cuts for Whom? Heterogeneous Effects of Income Tax Changes on Growth and Employment (2019, unknown): “Data are from replication files provided by Autor et al. (2016).”