Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/289599 
Year of Publication: 
2024
Series/Report no.: 
Working Paper Series No. 66
Publisher: 
University of Waterloo, Canadian Labour Economics Forum (CLEF), Waterloo
Abstract: 
Minimum wages decrease employment in competitive markets, but can increase it in monopsonistic markets so long as they do not exceed the marginal product of labour. We find evidence of non-monotonicity both by market structure and minimum wage level. Minimum wage hikes initially increase hours worked for minimum wage workers (MWWs) in high-concentration local labour markets (LLMs), while increasing job loss likelihood for MWWs in low-concentration LLMs. Repeated hikes reverse initial hours gains, and may increase job loss. Non-MWWs show economically negligible responses throughout. Observing minimum wage status allows for both within- and across-market difference-in-difference designs, whose findings provide mutual support. We combine these into a triple-difference specification. Our results help to resolve the lack of consensus around the sign of the minimum wage's employment effects.
Subjects: 
Minimum wage
Monopsony
Oligopsony
Local labour Markets
JEL: 
J22
J23
J38
J42
Document Type: 
Working Paper

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