Legal minimum wages and employment duration.

From: Southern Economic Journal | Date: January 1, 2004| Author: | Copyright information

1. Introduction

The effect of a legal minimum wage on employee turnover is an important consideration when evaluating the effectiveness of a minimum wage policy. If an increase in the minimum wage results in greater turnover, then firms' hiring costs are increased, and the direct benefit to workers who are paid the minimum wage may be lessened. A reduction in turnover, on the other hand, would mean more stability for employers and workers, though access to minimum wage jobs may be reduced for job seekers. Despite the recent proliferation of studies on the effects of legal ... 

<0.00001    0.9660 
 
C. When (minimum wage/state median wage) 
  is at its median sample value of 0.4308 
 
  Net effect of "started at the minimum wage"        1.1315    -0.3312 
  Net effect of "started below the minimum wage"     0.7047     0.2451 
  Net effect of "started no more than 10% above 
    the minimum wage"                                0.0548    -0.2128 
p values for hypothesis tests 
  [H.sub.0]: started at the minimum wage = 0         0.0029     0.0777 
  [H.sub.0]: started below the minimum wage = 0      0.0510     0.3248 
  [H.sub.0]: started no more than 10% above the 
    minimum wage = 0                                 0.8837     0.1799 
  [H.sub.0]: started at the minimum wage = 
    started below the minimum wage                   0.4306     0.0241 
  [H.sub.0]: started at the minimum wage = 
    Started no more than 10%n above the 
    minimum wage                                     0.0266     0.5621 
 
D. When (minimum wage/state median 
  wage) is at the value of its 
  10th percentile, 0.3691 
 
  Net effect of "started at the minimum wage"       -1.0881    -0.2409 
  Net effect of "started below the minimum wage"     1.9910     0.6894 
  Net effect of "started no more than 10% above 
    the minimum wage"                                0.6556    -0.0160 
 
p values for hypothesis tests 
  [H.sub.0]: started at the minimum wage = 0         0.1288     0.3860 
  [H.sub.0]: started below the minimum wage = 0      0.0045     0.2925 
  [H.sub.0]: started no more than 10% above 
    the minimum wage = 0                             0.2168     0.9451 
  [H.sub.0]: started at the minimum wage = 
    Started below the minimum wage                   0.0021     0.1529 
  [H.sub.0]: started at the minimum wage = 
    started no more than 10% above the 
    minimum wage                                     0.0594     0.4964 
 
(a) The estimated equations also include controls for training 
prior to the start of the current job as well as on the current 
job, previous experience, education, availability of medical 
insurance, union membership, employer size, wage growth on the 
current job, whether the job is part time, race, Armed Forces 
Qualifications Test (AFQT) score, number of children, marital 
status, number of jobs per year of experience, net family 
income, residence in the South or in an urban area, local 
unemployment rate. calendar year, state of residence, industry, 
and occupation. 
 
(b) t statistics are calculated using robust standard errors. 
 
Table 2. Fringe Benefits and Median Employment 
Durations for Men and Women 
 
                                   Median Employment Duration 
                                    When the Starting Wage Is 
 
                                      Below 
                                  Minimum Wage    Minimum Wage 
Variable                          (sample size)   (sample size) 
 
Women      Flexible work               36              49 
             hours                    (13)            (31) 
           Inflexible work            16.5             24 
             hours                    (24)            (19) 
Men        Flexible work               14              17 
             hours                     (9)             (8) 
           Inflexible work             39             17.5 
             hours                    (13)            (12) 
Women      Unpaid parental            33.5             61 
             leave available          (18)            (36) 
           No unpaid parental          20              28 
             leave available          (28)            (44) 
Men        Unpaid parental            15.5             42 
             leave available           (6)             (9) 
           No unpaid parental         26.5             29 
             leave available          (18)            (18) 
Women      Medical insurance          33.5             61 
             available                (10)            (34) 
           No medical insurance       23.5             33 
             available                (38)            (49) 
Men        Medical insurance          14.5            48.5 
             available                (14)            (10) 
           No medical insurance       39.5             18 
             available                (12)            (20) 
 
                                   Median Employment Duration 
                                    When the Starting Wage Is 
 
                                   [less than 
                                  or equal to] 
                                    10% above>

Read all of this article with a FREE trial to HighBeam Research

Related newspaper, magazine, and trade journal articles from HighBeam Research

(Including press releases, facts, information, and biographies)

Minimum wage drag
; ...Several states have minimum wage legislation pending...the record on the minimum wage stands at a resounding...to increase the minimum wage to $6.25 an hour...believe that the minimum wage doesn't work politically...research on the minimum wage and ...
Raise the minimum wage?
; ...Raise the minimum wage? Byline...raising the minimum wage. Virtually...mandating a minimum wage may make...Now, if minimum wage laws restrict...situation, a minimum wage would boost...So far, a minimum wage still seems...believe that ...
Minimum wage increase gains strength nationally
; ...in the Ohio minimum wage now have a little...raise Ohio's minimum wage to $6.85 per...raised their minimum wages, said Michael...have raised the minimum wage. Some are not...pushing the minimum wage up, said...The federal minimum wage, which ...
Fixing minimum wage levels in developing countries: common failures and remedies.(Statistical data)
; ...have set their minimum wages too high or too...article compares minimum wages worldwide, proposes...countries to set minimum wages at extreme levels...concludes that the minimum wage is used as a...debate about minimum wages among mainstream...judiciously ...
Raising the minimum wage.(GRAPH: NATIONAL)
; The federal minimum wage has been the focus of intense debate...Depression, in 1938. That year, the minimum wage was set at 25 cents an hour. It has...Since the last hike in the federal minimum wage, in 1997, repeated attempts to raise...Columbia have opted to raise their minimum ...
The minimum wage pendulum
; ...were published which showed that the minimum wage did not always have the effects predicted...small. Furthermore, even if raising the minimum wage harms employment, it might still reduce...enlightened understanding of the impact of minimum wage, this policy instrument is ...
States take lead on minimum wage
; ...the national minimum wage in the United...their own to set minimum wages higher than the...raising their minimum wages. Some states...increases.The U.S. minimum wage was last increased...battle over the minimum wage is expected to...two states with ...
STATE MINIMUM WAGE STAGNANT DOYLE WANTS BIG INCREASE TO MAKE UP FOR LAST 7 YEARS.(BUSINESS)
; ...they say, the minimum wage isn't meant to...proposing higher minimum wages for their cities...states that set minimum wages the next year...law mandates a minimum wage of $5.15 an hour...raising Madison's minimum wage to $5.70 this...Crosse are mulling ...
Minimum wage: It's not just for teenagers; An intelligent debate has to move beyond the dated arguments against a raise
; ...increase in the minimum wage. A majority of...percent - believe the minimum wage should be increased...revived. The federal minimum wage is $5.15 an hour...the inception of minimum wage in 1938. Nine times...themselves to set minimum wages above the ...
INDEX THE MINIMUM WAGE
; ...that raising the minimum wage has become an issue...5.25. The last minimum-wage increases came...for raising the minimum wage is simple. It gives...Americans paid the minimum wage run as high as...increase in the minimum wage can reduce ...