School Kids and Oil Rigs: Two More Pieces of the Post‐Katrina Puzzle in New Orleans

Shortly after Hurricane Katrina's landfall in August 2005 and the reports of rampant looting of businesses in the city, we became curious about the extent of Katrina looting as compared to that after other major storms that hit New Orleans in 1947 and in 1965. Using burglary as a proxy variable for looting, we discovered that the burglary rates in the month before and the month after Katrina were significantly higher than those before and after the other two hurricanes. We then investigated the socioeconomic conditions in the city in an effort to explain these numbers. Population loss and high unemployment rates, coupled with a decline in high‐paying manufacturing jobs and an increase in low‐wage food and hotel service jobs generated severe economic inequality in the city that exacerbated the situation created by Katrina. Our current analysis of the impact of public school desegregation and the oil bust suggests that both events contributed to population loss and the increase in low‐wage jobs prior to the storm. We believe that this type of research can assist in the recovery of New Orleans by providing an understanding of the city's pre‐Katrina social and economic conditions and make clearer which post‐Katrina changes are desirable.     

Teen employment, poverty, and the minimum wage: Evidence from Canada

In May 2007, the U.S. Congress enacted legislation, which increased the Federal minimum hourly wage from $5.15 to $7.25, over a two year time period. This increase to the minimum wage was the first in nearly a decade and was approved with the objective of alleviating poverty among low-income households. However, a higher minimum wage may result in more unemployment and poverty. We exploit time-series variation in minimum wages set by Canadian provinces between 1981 and 2004. OLS and IV results suggest that a 10% increase in the minimum wage is significantly correlated with a 3%-5% drop in teen employment. Further, a 10% rise in the minimum wage is also significantly associated with a 4%-6% increase in the percentage of families living under Low Income Cut Offs (LICOs). Difference-in-difference estimates from the 1993, 1995, and 1998 waves of the Survey of Consumer Finances (SCF) support these findings as they suggest that income earned by teens constitutes a non-trivial portion of household income for families beneath Low Income Cut Offs. Therefore, a higher minimum wage may paradoxically result in a significant negative shock to household income among low-income families.     

Youth minimum wage reform and the labour market in New Zealand

This paper analyses the effects of a large reform in the minimum wages affecting youth workers in New Zealand since 2001. Prior to this reform, a youth minimum wage, applying to 16–19 year-olds, was set at 60% of the adult minimum. The reform had two components. First, it lowered the eligible age for the adult minimum wage from 20 to 18 years, and resulted in a 69% increase in the minimum wage for 18 and 19 year-olds. Second, the reform raised the youth minimum wage in two annual steps from 60% to 80% of the adult minimum, and resulted in a 41% increase in the minimum wage for 16 and 17 year-olds over a two-year period. We estimate the impact of this reform by comparing average outcomes for these two groups of teenagers, before and after the change, to those for 20–25 year-olds, who were unaffected by the reform. We find no evidence of adverse effects on youth employment immediately following the reform, but some weak evidence of employment loss by 2003. We also find evidence of a 10–20% increase in hours worked following the reform for employed 16–17 year-olds, and up to a 10% increase for employed 18–19 year-olds, depending on the specification adopted. Combined, wage, hours, and employment changes lead to significant increases in labour earnings and total income of teenagers relative to young adults. However, we also find evidence of a decline in educational enrolment, and an increase in unemployment, inactivity, and benefit receipt rates, suggesting that while the minimum wage reform increased the labour supply of teenagers, this increase was not matched by as large an increase in employment.     

Wage and hour violations in urban labour markets: a comparison of Los Angeles,New York and Chicago

This article compares violations of minimum wage laws and other labour standards in New York City, Los Angeles and Chicago. Los Angeles has the highest violation rates, due to such factors as its industrial composition and disproportionately large number of small establishments, as well as its vast unauthorised immigrant population. In addition, Los Angeles’ higher rates reflect the stricter legal standards in California. We conclude that, although stronger workplace laws and regulations are crucial, in the absence of effective enforcement, they may fail to prevent workplace violations.     

The impact of minimum wages on wages,work and poverty in Nicaragua

In this paper we use an individual- and household-level panel data set to study the impact of changes in legal minimum wages on a host of labor market outcomes including: a) wages and employment, b) transitions of workers across jobs (in the covered and uncovered sectors) and employment status (unemployment and out of the labor force), and c) transitions into and out of poverty. We find that changes in the legal minimum wage affect only those workers whose initial wage (before the change in minimum wages) is close to the minimum. For example, increases in the legal minimum wage lead to significant increases in the wages and decreases in employment of private covered sector workers who have wages within 20% of the minimum wage before the change, but have no significant impact on wages in other parts of the distribution. The estimates from the employment transition equations suggest that the decrease in covered private sector employment is due to a combination of layoffs and reductions in hiring. Most workers who lose their jobs in the covered private sector as a result of higher legal minimum wages leave the labor force or go into unpaid family work; a smaller proportion find work in the public sector. We find no evidence that these workers become unemployed.Our analysis of the relationship between the minimum wage and household income finds: a) increases in legal minimum wages increase the probability that a poor worker's family will move out of poverty, and b) increases in legal minimum wages are more likely to reduce the incidence of poverty and improve the transition from poor to non-poor if they impact the head of the household rather than the non-head; this is because the head of the household is less likely than a non-head to lose his/her covered sector employment due to a minimum wage increase and because those heads that do lose covered sector employment are more likely to go to another paying job than are non-heads (who are more likely to go into unpaid family work or leave the labor force).     

Minimum wages,wages and employment in various sectors in Honduras

This paper contributes to our understanding of the impact of minimum wages on labor markets of developing countries, where there are often multiple minimum wages and compliance is weak. We examine how changes in more than 22 minimum wages over 1990–2004 affect employment, unemployment and average wages of workers in different sectors, defined by coverage under the legislation. The evidence suggests that minimum wages are effectively enforced only in medium and large-scale firms, where a 1% increase in the minimum wage leads to an increase of 0.29% in the average wage and a relatively large reduction in employment of ? 0.46%. We find that public sector wages emulate minimum wage trends but the higher cost of labor does not reduce employment there. There are no discernable effects of minimum wages on the wages of workers in small-firms or the self-employed; yet, higher minimum wages may create more unemployment. We conclude that (even under our upper bound estimate of the effect on the wages of workers) the total earnings of workers in the large-firm covered sector fall with higher minimum wages in Honduras, which warrants a policy dialogue on the structure and level of minimum wages.     

Estimating the effects of the minimum wage in a developing country: A density discontinuity design approach

This paper proposes a framework to identify the effects of the minimum wage on the joint distribution of sector and wage in a developing country. I show how the discontinuity of the wage distribution around the minimum wage identifies the extent of noncompliance with the minimum wage policy, and how the conditional probability of sector given wage recovers the relationship between latent sector and wages. I apply the method in the “PNAD,” a nationwide representative Brazilian cross‐sectional dataset for the years 2001–2009. The results indicate that the size of the informal sector is increased by around 39% compared to what would prevail in the absence of the minimum wage, an effect attributable to (i) unemployment effects of the minimum wage on the formal sector and (ii) movements of workers from the formal to the informal sector as a response to the policy.     

Inter-city wage differentials and intra-city workplace centralization

We explore the interaction of inter-city and intra-city wage differentials by occupation. The paper makes two main contributions. 1) We construct an occupation-specific index of workplace centralization that accounts for the difference between average employment density from the perspective of employees in each occupation and average employment density from the perspective of all employees. 2) We provide empirical evidence that relative wages of central to non-central occupations increase with city size, or equivalently, the elasticity of wages with respect to city size increases with occupational centrality. We conjecture that this empirical regularity arises because, as city size increases, workers in more central occupations face an increasingly less desirable locus of housing prices and commuting times relative to workers who have jobs in residential areas. The results are robust to the inclusion of individual-specific human capital variables and city-specific fixed effects.     

Job and wage mobility with minimum wages and imperfect compliance

We propose a job search model with minimum wage regulations and imperfect compliance to explain the doubling of the mean and variance of hourly earnings of white males during the first 18 years of labor market experience. The model encompasses job mobility and on‐the‐job wage growth as sources of wage dynamics, and is estimated by simulated generalized method of moments using data from the National Longitudinal Survey of Youths 1979. Our estimates provide a good fit for the observed levels and trends of the main job and wage mobility data, and for the increase in the mean and variance of wages over the life cycle, as well as for the fall in the fraction of workers paid below the minimum wage. Job mobility explains 40–50% of the observed wage growth. Increases in the minimum wage and/or compliance deliver small effects on the wage distribution and the nonemployment rate. Copyright © 2010 John Wiley & Sons, Ltd.     

The effect of the minimum wage for tipped workers on firm strategy,employees and social welfare

Millions of workers derive much of their income from tips and are subject to the “tipped minimum wage” that differs from the regular minimum wage. This article examines the implications of the tipped minimum wage and shows that increasing it may lead restaurants to adopt a compulsory service charge in lieu of tipping to extract the economic rent enjoyed by waiters under tipping. Because servers are better off with tipping, this implies that increasing the tipped minimum wage in an attempt to increase servers' income may achieve the opposite result. Moreover, increasing the tipped minimum wage may reduce social welfare.     

The effect of minimum wage hikes on employment: Evidence from regional panel data from Romania

Minimum wage hikes aim to increase the income of low-wage workers and improve their labour market participation. However, there are concerns that large increases may reduce employment, especially in countries where minimum wages increased quickly and whose competitiveness depends, at least partly, on low production costs. This study examines the employment effect of large increases in the minimum wage in Romania between 2008 and 2016. It uses regional (NUTS III) data and dynamic panel methods. The results do not support the hypothesis that minimum wage hikes reduce employment. They are robust to the use of different econometric methods, plausible variations of the specification and definitions of the key variables. Moreover, the results suggest insignificant effects even for low wage, less developed or high unemployment regions.     

The effects of multiple minimum wages throughout the labor market: The case of Costa Rica

This paper investigates the effects of legal minimum wages on employment and hours worked among workers covered by minimum wage legislation as well as those for whom it does not apply (the uncovered sector) in Costa Rica. This country's large uncovered sector and complex minimum wage policy, which has for decades set numerous wages throughout the wage distribution, provide a stimulating counterpoint to the U.S. framework for the analysis of the impact of minimum wages. Using 1988–2000 micro data, we find that a 10% increase in minimum wages lowers employment in the covered sector by 1.09% and decreases the average number of hours worked of those who remain in the covered sector by about 0.6%. We do not find a significant impact on hours worked in the uncovered sector. Finally, we show that despite the wide range of minimum wages, the largest impact on the employment of covered sector workers is in the lower half of the skill distribution.     

End the minimum wage debate: Revise the concept itself

The debate over raising the minimum wage focuses on the wrong point. We should be trying to change the concept of minimum wage to one that reflects what it really is—an entry wage. The real issue in the minimum wage debate needs to be one of clarifying the underlying human/social purpose of the minimum wage concept.     

Noncompliance and the effects of the minimum wage on hours and welfare in competitive labor markets

This paper shows that increases in the minimum wage rate can have ambiguous effects on the working hours and welfare of employed workers in competitive labor markets. The reason is that employers may not comply with the minimum wage legislation and instead pay a lower subminimum wage rate. If workers are risk neutral, we prove that working hours and welfare are invariant to the minimum wage rate. If workers are risk averse and imprudent (which is the empirically likely case), then working hours decrease with the minimum wage rate, while their welfare may increase.     

Minimum wages and employment in Swedish hotels and restaurants

This paper considers the effects of union-bargained minimum wages on transitions into and out of employment in the hotels and catering industry over the period 1979–99. This industry is characterised by a high fraction of unskilled labour input, high worker turnover and binding minimum wages. The empirical approach identifies workers affected by real minimum wage increases and decreases, respectively. Job separations and accessions for the treatment groups are then contrasted to the outcomes for control groups, with wages marginally above those of the treatment groups. Unlike previous studies, this paper also considers same-period transitions for same-wage workers who are unaffected by minimum wage changes. This procedure should help to control for unobserved differences between high- and low-wage workers and is made possible by the diversified minimum wage structure of the industry. According to the results, job separations tend to increase with rising minimum wages (except for teenagers during 1993–98). The evidence regarding accessions is less conclusive.     

最低工资与全要素生产率：机制讨论与经验证据

最低工资标准逐年上调导致企业劳动力成本不断上升,其对我国企业全要素生产率影响存在争议。将2012—2019年全国405个地级市最低工资标准数据和中国上市公司数据匹配,从要素替代和技术替代效应两个视角探讨其内在影响机制。研究发现：最低工资上调会降低企业的全要素生产率;最低工资对企业全要素生产率挤出效应表现为国有企业和融资约束程度越高的企业挤出效应更强,中部地区的挤出效应强于东部地区;最低工资标准越高,企业越倾向于通过要素替代和技术替代来改变生产效率。研究对提高全要素生产率和实现经济高质量发展具有重要参考意义。     

最低工资对正规部门、非正规部门工资和就业的影响

本文根据是否遵守最低工资标准,将劳动部门分为正规部门和非正规部门。利用中国健康与营养调查（CHNS）微观数据,运用固定效应模型和Multinomial Logit模型,本文实证研究了2004年以来,最低工资对正规部门和非正规部门工资和就业的影响。研究发现：最低工资每提高1%,正规部门工资会增加0.5%,非正规部门平均工资下降统计不显著,而处于最低工资线附近的非正规部门劳动者工资下降0.77%;最低工资提高使得失业者向非正规部门流动,而非正规部门劳动者向正规部门流动,最终将有利于劳动者在正规部门就业。因此,政府在制定最低工资制度时应全面考虑最低工资标准作用效果的部门差异。     

Is there a minimum wage biting in Puerto Rico? Updating the debate

This research evaluates the repercussions on employment in Puerto Rico of the latest increases in the minimum wage (made between 2007 and 2009). We find that the increases in the minimum wage to $7.25 had a negative impact on employment in a few small sectors only, and that employment was significantly more affected by output.     

Can a minimum wage increase employment and reduce prices in a neoclassical perfect information economy?

This paper investigates the possibility that the imposition of a minimum wage increases employment in the affected sector, measured in terms of hours of work, and lowers product prices. Unlike related prior theoretical research, I consider a neoclassical perfect information economy. Both labor and product markets are assumed to be perfectly competitive. Workers choose the number of hours of work and their effort level. Workers can potentially, but not necessarily, differ in their preferences over income, leisure, and effort. Effort is perfectly observable by the employers. The general framework that highlights the channels through which a minimum wage can increase employment and reduce prices is introduced and necessary and sufficient conditions derived. The paper also develops a number of comparative statics and some illustrative examples. The results provide a simple theoretical foundation that explains some recent findings of the empirical literature on minimum wages. Auxiliary results help explain the effects of minimum wage on the entire wage distribution in a way that is consistent with empirical findings. Finally, welfare analysis shows that worker welfare and employment tend to go in opposite directions; in particular, if employment increases after the imposition of the minimum wage, worker welfare will be reduced, though not necessarily vice versa (the opposite is true for consumer welfare). Strikingly, if a minimum wage increases worker welfare, the chief beneficiaries are not the affected workers but those with incomes that exceed the minimum wage.     

The effect of the minimum wage on employment and hours

This study examines the effect of minimum wage increases on teen hours of work and employment using both state- and individual-level panel data in the US. The state-level results indicate that minimum wage increases may lower employment rates but do not adversely affect hours among either working teens or all teens. The individual-level results do not indicate that minimum wage increases have a significant negative effect on hours worked by low-wage teens who are likely to be affected by a minimum wage increase. The results suggest that low-wage teens are less likely to remain employed, relative to high-wage teens, when the minimum wage is raised. However, this adverse effect disappears when these low-wage teens are compared to other low-wage teens during periods when the minimum wage did not increase.