Hedonic-Based Labor Supply Substitution and the Ripple Effect of Minimum Wages

• 成果类型: Article
• 署名作者: Phelan, Brian J.
• 署名单位: DePaul University
• 刊物名称: JOURNAL OF LABOR ECONOMICS
• ISSN/ISSBN: 0734-306X
• DOI: 10.1086/702651
• 发表日期: 2019
• 页码: 905-947
• 关键词: market outcomes; UNITED-STATES; INEQUALITY; IMPACT

摘要

This paper analyzes a new explanation of the ripple effect of minimum wages based on how minimum wages affect hedonic compensation. Minimum wage hikes lower compensating differentials at low-skill undesirable jobs because they raise wages at the most desirable low-skill job, the minimum wage job. This change in hedonic compensation may cause some individuals to optimally leave low-wage undesirable jobs and seek more desirable employment. If labor supply falls at low-wage undesirable jobs, employers would raise wages, consistent with the ripple effect. Empirically, I provide evidence that hedonic-based labor supply substitution is taking place and contributing to the ripple effect.