Department

Economics

Publication Year

2006

Abstract

This paper examines the impact of minimum wages on unemployment duration for displaced workers. I utilize the Displaced Worker Survey to examine the effects of minimum wages, while controlling for individual characteristics, and state and year effects that may be correlated with the value of the state minimum wage. The empirical results suggest that an increase in the minimum wage may have differential effects which are conditional upon receipt of unemployment insurance; however, there are no overall increases in unemployment duration associated with higher minimum wages. These results are robust to changes in specification and different measures designed to capture the binding nature of a given minimum wage.

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