New Estimates of the Effects of Minimum Wages in the U.S. Retail Trade Sector

37 Pages Posted: 4 Aug 2008

See all articles by John T. Addison

John T. Addison

University of South Carolina - Moore School of Business - Department of Economics; IZA Institute of Labor Economics

McKinley L. Blackburn

University of South Carolina - Darla Moore School of Business

Chad Cotti

University of Wisconsin - Oshkosh

Abstract

This paper examines the impact of minimum wages on earnings and employment in selected branches of the retail-trade sector, 1990-2005, using county-level data on employment and a panel regression framework that allows for county-specific trends in sectoral outcomes. We focus on particular subsectors within retail trade that are identified as particularly low-wage. We find little evidence of disemployment effects once we allow for geographic-specific trends. Rather, in many sectors the evidence suggests modest (but robust) positive employment effects. One explanation we consider for these 'perverse' effects is that minimum wages may have significant influences on product demand shifts.

Keywords: minimum wages, wages and employment, county-level data, spatial trends, border county analysis, unions, right-to-work states

JEL Classification: J23, J38

Suggested Citation

Addison, John T. and Blackburn, McKinley L. and Cotti, Chad, New Estimates of the Effects of Minimum Wages in the U.S. Retail Trade Sector. IZA Discussion Paper No. 3597. Available at SSRN: https://ssrn.com/abstract=1184007 or http://dx.doi.org/10.1111/j.0042-7092.2007.00700.x

John T. Addison (Contact Author)

University of South Carolina - Moore School of Business - Department of Economics ( email )

The Francis M. Hipp Building
1705 College Street
Columbia, SC 29208
United States
803-777-7400 (Phone)
803-777-6876 (Fax)

HOME PAGE: http://mooreschool.sc.edu/moore/economics/profiles/addison.htm

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

McKinley L. Blackburn

University of South Carolina - Darla Moore School of Business ( email )

1705 College St
Francis M. Hipp Building
Columbia, SC 29208
United States
803-777-4931 (Phone)
803-777-6876 (Fax)

Chad Cotti

University of Wisconsin - Oshkosh ( email )

800 Algoma Blvd
Oshkosh, WI WI 54901
United States

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