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The effects of minimum wages over the business cycle: the Great Recession

Oudom Hean (Department of Transportation, Logistics and Finance, North Dakota State University, Fargo, North Dakota, USA) (Challey Institute for Global Innovation and Growth, North Dakota State University, Fargo, North Dakota, USA)
Nanxin Deng (Department of Economics, East China University of Science and Technology, Shanghai, China)

International Journal of Manpower

ISSN: 0143-7720

Article publication date: 13 May 2022

Issue publication date: 14 March 2023

394

Abstract

Purpose

This paper examines disemployment effects of minimum wages during the period 2002–2010.

Design/methodology/approach

The authors employ the discontinuity design.

Findings

The authors find that minimum wages had a significant negative impact on teen employment before the Great Recession. During the Great Recession, the disemployment effects of minimum wages were insignificant. The finding is consistent with the evolution of firms’ market power during the business cycle.

Originality/value

The authors attempt to reconcile the debate about the effects of minimum wages on US employment.

Keywords

Citation

Hean, O. and Deng, N. (2023), "The effects of minimum wages over the business cycle: the Great Recession", International Journal of Manpower, Vol. 44 No. 1, pp. 19-36. https://doi.org/10.1108/IJM-07-2021-0402

Publisher

:

Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

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