Getting Handcuffs on an Octopus: Minimum Wages, Employment, and Turnover
51 Pages Posted: 16 Mar 2013 Last revised: 15 Aug 2014
Date Written: January 30, 2014
Theoretical work on minimum wage policy emphasizes labor market dynamics, but the resulting implications for worker mobility remain largely untested. We show that in the teenage labor market minimum wages reduce worker flows and increase job stability. Furthermore, we find that the employment effects of the minimum wage vary considerably across markets that exhibit different degrees of labor market tightness. Our results help explain the small effects of minimum wages on employment commonly found in the aggregate data and are consistent with labor market involving search frictions.
Keywords: Minimum Wage, Job Flows, Turnover, Unemployment
JEL Classification: J38, J39, J63, J64, J68, E24
Suggested Citation: Suggested Citation