INDUSTRY DYNAMICS AND THE MINIMUM WAGE: A PUTTY-CLAY APPROACH

• 成果类型: Article
• 署名作者: Aaronson, Daniel; French, Eric; Sorkin, Isaac; To, Ted
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - Chicago; University of London; University College London; Centre for Economic Policy Research - UK; Stanford University; National Bureau of Economic Research
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12262
• 发表日期: 2018
• 页码: 51-84
• 关键词: fast-food industry; new-jersey; EMPLOYMENT; search; entry; EXIT

摘要

We document two new findings about the industry-level response to minimum wage hikes. First, restaurant exit and entry both rise following a hike. Second, there is no change in employment among continuing restaurants. We develop a model of industry dynamics based on putty-clay technology that is consistent with these findings. In the model, continuing restaurants cannot change employment, and thus industry-level adjustment occurs gradually through exit of labor-intensive restaurants and entry of capital-intensive restaurants. Interestingly, the putty-clay model matches the small estimated short-run disemployment effect of the minimum wage found in other studies, but produces a larger long-run disemployment effect.