Minimum Wage Increases and Individual Employment Trajectories

47 Pages Posted: 22 Oct 2018

See all articles by Ekaterina jardim

Ekaterina jardim

Amazon.com

Mark C. Long

University of Washington - Daniel J. Evans School of Public Affairs

Robert D. Plotnick

University of Washington - Daniel J. Evans School of Public Affairs

Emma van Inwegen

University of Washington

Jacob Vigdor

University of Washington

Hilary Wething

University of Washington - Daniel J. Evans School of Public Affairs

Date Written: October 2018

Abstract

Using administrative employment data from the state of Washington, we use short-duration longitudinal panels to study the impact of Seattle’s minimum wage ordinance on individuals employed in low-wage jobs immediately before a wage increase. We draw counterfactual observations using nearest-neighbor matching and derive effect estimates by comparing the “treated” cohort to a placebo cohort drawn from earlier data. We attribute significant hourly wage increases and hours reductions to the policy. On net, the minimum wage increase from $9.47 to as much as $13 per hour raised earnings by an average of $8-$12 per week. The entirety of these gains accrued to workers with above-median experience at baseline; less-experienced workers saw no significant change to weekly pay. Approximately one-quarter of the earnings gains can be attributed to experienced workers making up for lost hours in Seattle with work outside the city limits. We associate the minimum wage ordinance with an 8% reduction in job turnover rates as well as a significant reduction in the rate of new entries into the workforce.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Suggested Citation

jardim, Ekaterina and Long, Mark C. and Plotnick, Robert D. and van Inwegen, Emma and Vigdor, Jacob and Wething, Hilary, Minimum Wage Increases and Individual Employment Trajectories (October 2018). NBER Working Paper No. w25182. Available at SSRN: https://ssrn.com/abstract=3270762

Ekaterina Jardim (Contact Author)

Amazon.com ( email )

Seattle, WA 98144
United States

Mark C. Long

University of Washington - Daniel J. Evans School of Public Affairs ( email )

Seattle, WA 98125
United States

Robert D. Plotnick

University of Washington - Daniel J. Evans School of Public Affairs ( email )

Seattle, WA 98125
United States

Emma Van Inwegen

University of Washington ( email )

Seattle, WA 98195
United States

Jacob Vigdor

University of Washington ( email )

Hilary Wething

University of Washington - Daniel J. Evans School of Public Affairs ( email )

Seattle, WA 98125
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
41
Abstract Views
1,029
PlumX Metrics