Meta Analysis: Raising the Minimum Wage Has Zero Disemployment Effect

minimum wage effects

Hristos Doucouliagos and T. D. Stanley (2009) conducted a meta-study of 64 minimum-wage studies published between 1972 and 2007 measuring the impact of minimum wages on teenage employment in the United States. When they graphed every employment estimate contained in these studies (over 1,000 in total), weighing each estimate by its statistical precision, they found that the most precise estimates were heavily clustered at or near zero employment effects.

So, there you have it: A clear picture of the hunt for job-loss effects clumping around zero.  That doesn’t mean no one ever loses a job or faces hours’ cutbacks when the minimum wage goes up.  But it does mean that the policy has its intended effect of raising the pay of its target population without the unintended consequences relentlessly touted by opponents.

read the entire article by Michelle A.M. Brown @  MSNBC:

http://tv.msnbc.com/2013/02/25/minimum-wage-meta-analysis-evidence-over-theory/

Minimum Wage/Maximum Growth

Minimum Wage/Maximum Growth
Posted: 02/21/2013 3:20 pm
Robert D. Atkinson, Ph.D.
In his State of the Union Address president Obama proposed that Congress increase the minimum wage to $9.00 per hour.
Almost immediately a chorus of opposition based on neoclassical economics emerged, arguing that such a change would kill job creation. As former Bush Administration economist Greg Mankiw notes, “there is 79 percent agreement among his peers that a minimum wage increases unemployment among young and unskilled workers.” But let’s be clear, what Mankiw really means to say is a 79 percent agreement among neoclassical economists.
In fact, a higher minimum wage would spur economic growth, while also increasing economic fairness.

STUDY: Do Minimum Wages Really Reduce Teen Employment?

Do Minimum Wages Really Reduce Teen Employment?

Accounting for Heterogeneity and Selectivity in State Panel Data

SYLVIA A. ALLEGRETTO, ARINDRAJIT DUBE, and
MICHAEL REICH

Traditional estimates that often find minimum wage disemployment effects include controls for state unemployment rates and state-and year-fixed effects. Using CPS data on teens for the period 1990–2009, we show that such estimates fail to account for heterogeneous employment patterns that are correlated with selectivity among states with minimum wages. As a result, the estimates are often biased and not robust to the source of identifying variation. Including controls for long-term growth differences among states and for heterogeneous economic shocks renders the employment and hours elasticities indistinguishable from zero and rules out any but very small disemployment effects. Dynamic evidence further shows the nature of bias in traditional estimates, and it also rules out all but very small negative long-run effects. In addition, we do not find evidence that employment effects vary in different
parts of the business cycle. We also consider predictable versus unpredictable changes in the minimum wage by looking at the effects of state indexation of the minimum wage.

 http://www.irle.berkeley.edu/workingpapers/166-08.pdf