Neumark, David, Mark Schweitzer, and William Wascher. 2004. "Minimum Wage Effects throughout the Wage Distribution." Journal of Human Resources 39(2): 425-450.

This paper provides evidence on a wide set of margins along which labor markets can adjust in response to increases in the minimum wage, including wages, hours, employment, and ultimately labor income. Not surprisingly, the evidence indicates that low-wage workers are most strongly affected, while higher-wage workers are little affected. Workers who initially earn near the minimum wage experience wage gains. Nevertheless, their hours and employment decline, and the combined effect of these changes on earned income suggests adverse consequences, on net, for low-wage workers.

David Neumark is a senior fellow at the Public Policy Institute of California, a professor of economics at Michigan State University, and a research associate of the NBER. Mark Schweitzer is an economist at the Federal Reserve Bank of Cleveland. William Wascher is assistant director in the Division of Research and Statistics, Board of Governors of the Federal Reserve System. The authors are grateful to Scott Adams for outstanding research assistance, and to seminar participants at Michigan State, the University of Kentucky, UC-Berkeley, the Federal Reserve Bank of Cleveland, and Florida State University for helpful comments. The views expressed do not necessarily reflect the views of the Public Policy Institute of California, the Federal Reserve Board, the Federal Reserve Bank of Cleveland, or their staffs. The data used in this article can be obtained beginning October 2004 through September 2007 from Mark Schweitzer, Federal Reserve Bank of Cleveland, P.O. Box 6387, Cleveland, OH 44101.