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Research ArticleArticles
Open Access

Heterogeneous Impact of the Minimum Wage

Implications for Changes in Between- and Within-Group Inequality

View ORCID ProfileTatsushi Oka and View ORCID ProfileKen Yamada
Journal of Human Resources, January 2023, 58 (1) 335-362; DOI: https://doi.org/10.3368/jhr.58.3.0719-10339R1
Tatsushi Oka
Tatsushi Oka is an associate professor of econometrics and business statistics at Monash University.
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Ken Yamada
Ken Yamada is a professor of economics at Kyoto University ().
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  • For correspondence: yamada{at}econ.kyoto-u.ac.jp
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    Figure 1

    Proportion and Characteristics of Minimum Wage Workers

    Notes: Panel A is reproduced from Figure 2 in Autor, Manning, and Smith (2016) (© American Economic Association; reproduced with permission of the American Economic Journal: Applied Economics’). In Panel B, less-educated workers are those with a high school degree or less, and young workers are those aged 24 years or younger.

  • Figure 2
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    Figure 2

    The Statutory Minimum Wage, 1979-2012

    Notes: Panel A includes Alabama, Georgia, Idaho, Indiana, Kansas, Louisiana, Mississippi, North Dakota, Nebraska, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, and Wyoming. Panel B includes Arkansas, Arizona, Colorado, Kentucky, Maryland, Michigan, Minnesota, Missouri, Montana, North Carolina, New Hampshire, New Mexico, Nevada, Ohio, Pennsylvania, Wisconsin, and West Virginia. Panel C includes Alaska, California, Connecticut, Delaware, Florida, Hawaii, Iowa, Illinois, Massachusetts, Maine, New Jersey, New York, Oregon, Rhode Island, Vermont, and Washington.

  • Figure 3
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    Figure 3

    The Real Value of the Minimum Wage, 1979–2012

    Notes: National means are reported. The base year is 2012.

  • Figure 4
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    Figure 4

    Inequality Measures

    Notes: The conditional quantile function Qst(τ|z) is an inverse of Fst(w|z), where Fst(·|z) is the conditional distribution function of wist given zist = z in state s and year t.

  • Figure 5
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    Figure 5

    Impact of the Minimum Wage on the Wage Structure

    Notes: Estimates of partial effects in Equation 2 are reported. The shaded area represents the 95 percent confidence interval. See Online Appendix Figure D2 for the uniform confidence band.

  • Figure 6
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    Figure 6

    Long-Term Effect of the Minimum Wage on the Wage Structure

    Notes: Estimates of the long-term effects in Equation 5 are reported. The shaded area represents the 95 percent confidence interval. See Online Appendix Figure D3 for the uniform confidence band.

  • Figure 7
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    Figure 7

    Placebo Effect on the Wage Structure

    Notes: Estimates of the leading effects in Equation 5 are reported. The shaded area represents the 95 percent confidence interval. See Online Appendix Figure D4 for the uniform confidence band.

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    Figure 8

    Changes in the Educational Wage Differential (16 vs. 12 Years of Education) Due to the Minimum Wage, 1989—2012

    Notes: Bar charts represent national means. Error bars represent maximum and minimum values. The log-point changes in the educational wage differential due to the minimum wage are obtained from Equation 7.

  • Figure 9
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    Figure 9

    Actual and Counterfactual Changes in the Educational Wage Differential (16 vs. 12 Years of Education), 1989–2012

    Notes: National means are reported. Counterfactual log-point changes in the educational wage differential are obtained using Equations 6 and 7.

  • Figure 10
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    Figure 10

    Changes in the Experience Wage Differential (25 vs. 5 Years of Experience) Due to the Minimum Wage, 1989-2012

    Notes: Bar charts represent national means. Error bars represent maximum and minimum values. The log-point changes in the experience wage differential due to the minimum wage are obtained from Equation 7.

  • Figure 11
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    Figure 11

    Actual and Counterfactual Changes in the Experience Wage Differential (25 vs. 5 Years of Experience), 1989–2012

    Notes: National means are reported. Counterfactual log-point changes in the experience wage differential are obtained using Equations 6 and 7.

  • Figure 12
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    Figure 12

    Changes in the Gender Wage Differential (Males vs. Females) Due to the Minimum Wage, 1989–2012

    Notes: Bar charts represent national means. Error bars represent maximum and minimum values. The log-point changes in the gender wage differential due to the minimum wage are obtained from Equation 7.

  • Figure 13
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    Figure 13

    Actual and Counterfactual Changes in the Gender Wage Differential (Males vs. Females), 1989—2012

    Notes: National means are reported. Counterfactual log-point changes in the gender wage differential are obtained using Equations 6 and 7.

  • Figure 14
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    Figure 14

    Changes in the 90/10, 50/10, and 50/20 Within-Group Differentials Due to the Minimum Wage, 1989–2012

    Notes: Bar charts represent national means. Error bars represent maximum and minimum values. The log-point changes in the within-group wage differentials due to the minimum wage are obtained from Equation 9.

  • Figure 15
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    Figure 15

    Actual and Counterfactual Changes in the 90/10, 50/10, and 50/20 Within-Group Differentials, 1989–2012

    Notes: National means are reported. Counterfactual log-point changes in the within-group wage differentials are obtained using Equations 8 and 9.

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Journal of Human Resources: 58 (1)
Journal of Human Resources
Vol. 58, Issue 1
1 Jan 2023
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Heterogeneous Impact of the Minimum Wage
Tatsushi Oka, Ken Yamada
Journal of Human Resources Jan 2023, 58 (1) 335-362; DOI: 10.3368/jhr.58.3.0719-10339R1

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Heterogeneous Impact of the Minimum Wage
Tatsushi Oka, Ken Yamada
Journal of Human Resources Jan 2023, 58 (1) 335-362; DOI: 10.3368/jhr.58.3.0719-10339R1
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