When the minimum wage really bites hard: The negative spillover effect on high-skilled workers

• 成果类型: Article
• 署名作者: Gregory, Terry; Zierahn, Ulrich
• 署名单位: IZA Institute Labor Economics; Leibniz Association; Zentrum fur Europaische Wirtschaftsforschung (ZEW); Utrecht University; Leibniz Association; Ifo Institut
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2021.104582
• 发表日期: 2022
• 关键词: minimum wages; Wage effects; Spillover effects; Returns to skills; Unconditional quantile regression; Scale effect; Substitution effect; Skill supply; Labor-labor substitution

摘要

Minimum wage levels are rising around the globe. To shed more light on the possible unintended side effects of higher wage floors, we study the impact of a minimum wage introduction on wages and employment in a quasi-experimental setting where the minimum wage is set extraordinarily high during an economic downturn. We identify treatment effects along different wage and skill groups and find positive wage and employment spillover effects for medium-skilled workers with salaries just above the minimum wage. More striking, we find negative wage and employment effects for high-skilled workers who are further up the wage distribution, followed by reduced returns to skills and industry skill supply. We explain these adjustments with a substitution-scale model that predicts negative spillover effects whenever labor-labor substitutions toward high-skilled workers are overcompensated by an overall decline in industry employment. Even though we focus on a specialized industry, we lay out the general conditions under which such unfavorable adjustments may occur in other contexts. (C) 2021 The Author(s). Published by Elsevier B.V.