Department of Economics

Employment Effects of the 2009 Minimum Wage Increase: Evidence from State Comparisons of At-Risk Workers (Revised Version)

Department of Economics
University of Delaware
Working Paper #2011-16

Employment Effects of the 2009 Minimum Wage Increase: Evidence from State Comparisons of At-Risk Workers (Revised Version)

Saul D. Hoffman and Chenglong Ke

ABSTRACT

In July, 2009, the U.S. Federal minimum wage was increased from $6.55 to $7.25. Individuals in some states were unaffected by this increase, since the state minimum wage already exceeded $7.25. We use this variation to make comparisons of the employment of “at-risk” workers with their peers across states and with workers within states who were arguably unaffected by the increase. Our data come from the 2009 CPS, four and five months before and after the increase. We find little evidence of negative employment effects for teens or less- educated adults, but some stronger evidence of a negative effect for young adults with a high school degree or less. Control for demographic characteristics reduces the size and significance of the estimated effects.

JEL Codes:J08, J21, J38

Keywords:  Minimum Wage

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