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Industry Effects of Minimum Wages
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
2021 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

Despite ample evidence on the employment effects of minimum wages, the policy’s potential disruptive effects at the industry-level have remained largely neglected in the empirical literature. Recent empirical work and theory suggest that a scenario in which the minimumwage skew low-wage industries towards fewer and large firms, is highly plausible. This, in turn,is a clear indication of reduced product market competition. To investigate this issue, we make use of panel data that covers 51 states in the U.S. from 1980 to 2016 and employ an empirical specification that rely on the novel triple differences strategy. Our findings reveal that minimum wage increases cause the share of large firms in a typical low-wage industry to increase, and that the exit-rate intensifies across the same industry. The research contributes to the broader minimum wage literature as the first study to thoroughly investigate and present evidence on the effect of minimum wages on variables that are indicative of market concentration. In sum, our findings suggest that policy makers should not turn a blind eye to industry-level effects of the minimum wage.

Place, publisher, year, edition, pages
2021.
National Category
Economics
Identifiers
URN: urn:nbn:se:uu:diva-453204OAI: oai:DiVA.org:uu-453204DiVA, id: diva2:1594210
Subject / course
Economics
Educational program
Master Programme in Economics
Available from: 2023-02-16 Created: 2021-09-15 Last updated: 2023-02-16Bibliographically approved

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