Minimum wages, employment, and the distribution of income

Abstract

After nearly a decade of relative quiet, the increases in the US minimum wage that began in 1990 have coincided with a renewed interest in its effects. Recent work suggests that a relative consensus on the effects of the minimum wage on employment came undone; on balance, however, the recent estimates seem if anything smaller than those suggested by the earlier literature, and the puzzle of why they are relatively small remains. Effects of the minimum wage on the wage distribution became clearer with the declining real minimum wage in the 1980s; nevertheless, the ability of minimum wages to equalize the distribution of family incomes remains quite limited.

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