Minimum Wage Increases and Low-Wage Employment: Evidence from Seattle
Mark C. Long
Emma van Inwegen
- American Economic Journal: Economic Policy (Forthcoming)
Seattle raised its minimum wage to as much as $11 in 2015 and as much to $13 in 2016. We use
Washington State administrative data to conduct two complementary analyses of its impact.
Relative to outlying regions of the state identified by the synthetic control method, aggregate
employment at wages less than twice the original minimum, measured by total hours worked,
declined. A portion of this reduction reflects jobs transitioning to wages above the threshold; the
aggregate analysis likely overstates employment effects. Longitudinal analysis of individual
Seattle workers matched to counterparts in outlying regions reveals no change in the probability
of continued employment, but significant reductions in hours particularly for less-experienced
workers. Job turnover declined, as did hiring of new workers into low-wage jobs. Analyses
suggest aggregate employment elasticities in the range of -0.2 to -2.0, concentrated on the
intensive margin in the short run and largest among inexperienced workers.
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