scholarly journals City Minimum Wages and Spatial Equilibrium Effects

2021 ◽  
Author(s):  
Jorge Perez Perez
Keyword(s):  
Labor Markets ◽  
Minimum Wage ◽  
The United States ◽  
Local Labor Markets ◽  
Spatial Equilibrium ◽  
High Minimum Wage ◽  
Percent Increase ◽  
And Migration ◽  
Wage Increases

Local minimum wage laws are becoming common across U.S. cities, and their effects may be different from the effects of state or national minimum wage policies. This paper studies the effect of changes in the minimum wage on spatial equilibriums in local labor markets. Using residence and workplace data for the United States, I analyze how commuting, residence, and employment locations change across city and state borders if the minimum wage changes on one side of the border. I find that areas in which the minimum wage increases receive fewer low-wage commuters. A 10 percent increase in the minimum wage reduces the inflow of low-wage commuters by about 2.5 percent. Rises in the minimum wage are also associated with employment relocation across borders toward areas that did not witness an increase in the minimum wage. I formulate a spatial equilibrium gravity model to explain the distribution of workers between low- and high-minimum wage areas. I calculate counterfactual equilibriums with a higher minimum wage for U.S. counties with cities considering an increase, highlighting the role of commuting and migration responses. About two-fifths of the counties considering increases would receive fewer low-wage commuters. Employment relocation away from high-minimum wage areas drives the commuting losses.

scholarly journals Risk, Recessions and Resilience: Towards Sustainable Local Labor Markets through Employment Portfolio Analysis

2021 ◽  
Vol 13 (14) ◽  
pp. 7926
Author(s):  
Bharman Gulati ◽  
Stephan Weiler
Keyword(s):  
Labor Market ◽  
Labor Markets ◽  
Positive Impact ◽  
The United States ◽  
Local Economy ◽  
Local Labor Markets ◽  
Local Labor Market ◽  
Business Survival ◽  
Trade Offs ◽  
New Business

This paper explores the role of local labor market dynamics on the survival of new businesses. The characteristics of the local labor market are likely to influence the survival of new businesses, the level of entrepreneurship, and the resilience of the regional economy. We apply portfolio theory to evaluate employment-based and income-based measures of risk-and-return trade-offs in local labor markets on new business survival in the United States. Our results show that volatility in local labor markets has a positive impact on new business survival, especially in Metropolitan Statistical Areas. The results are robust across different timeframes, including during economic downturns, thus highlighting the contribution of new businesses in developing the resilience of the local economy, and further promoting sustainable regional economic development.

Trade and Labor Market Dynamics: General Equilibrium Analysis of the China Trade Shock

Econometrica ◽  
2019 ◽  
Vol 87 (3) ◽  
pp. 741-835 ◽  
Author(s):  
Lorenzo Caliendo ◽  
Maximiliano Dvorkin ◽  
Fernando Parro
Keyword(s):  
Labor Markets ◽  
Equilibrium Analysis ◽  
Trade Model ◽  
China Trade ◽  
Transition Costs ◽  
Long Run ◽  
Labor Market Dynamics ◽  
And Migration ◽  
Labor Dynamics

We develop a dynamic trade model with spatially distinct labor markets facing varying exposure to international trade. The model captures the role of labor mobility frictions, goods mobility frictions, geographic factors, and input‐output linkages in determining equilibrium allocations. We show how to solve the equilibrium of the model and take the model to the data without assuming that the economy is at a steady state and without estimating productivities, migration frictions, or trade costs, which can be difficult to identify. We calibrate the model to 22 sectors, 38 countries, and 50 U.S. states. We study how the rise in China's trade for the period 2000 to 2007 impacted U.S. households across more than a thousand U.S. labor markets distinguished by sector and state. We find that the China trade shock resulted in a reduction of about 0.55 million U.S. manufacturing jobs, about 16% of the observed decline in manufacturing employment from 2000 to 2007. The U.S. gains in the aggregate, but due to trade and migration frictions, the welfare and employment effects vary across U.S. labor markets. Estimated transition costs to the new long‐run equilibrium are also heterogeneous and reflect the importance of accounting for labor dynamics.

scholarly journals The Econometrics and Economics of the Employment Effects of Minimum Wages: Getting from Known Unknowns to Known Knowns

2019 ◽  
Vol 20 (3) ◽  
pp. 293-329 ◽  
Author(s):  
David Neumark
Keyword(s):  
United States ◽  
Minimum Wage ◽  
Past Research ◽  
The United States ◽  
Minimum Wages ◽  
Definitive Answer ◽  
Employment Effects ◽  
Conflicting Evidence ◽  
Known Unknowns ◽  
Wage Increases

Abstract I discuss the econometrics and the economics of past research on the effects of minimum wages on employment in the United States. My intent is to try to identify key questions raised in the recent literature, and some from the earlier literature, which I think hold the most promise for understanding the conflicting evidence and arriving at a more definitive answer about the employment effects of minimum wages. My secondary goal is to discuss how we can narrow the range of uncertainty about the likely effects of the large minimum wage increases becoming more prevalent in the United States. I discuss some insights from both theory and past evidence that may be informative about the effects of high minimum wages, and try to emphasize what research can be done now and in the near future to provide useful evidence to policymakers on the results of the coming high minimum wage experiment, whether in the United States or in other countries.

Gender, Migration, and the Pursuit of Security

2020 ◽  
pp. 20-39
Author(s):  
Cynthia J. Cranford
Keyword(s):  
Los Angeles ◽  
Labor Markets ◽  
Global Economy ◽  
Domestic Work ◽  
The United States ◽  
Immigrant Workers ◽  
Dynamic Processes ◽  
Local Labor Markets ◽  
Personal Support ◽  
Personal Support Workers

This chapter discusses how dynamic processes of gendering, racialization, and precarization make diverse people into personal support workers who lack security at the labor market and intimate levels. Enduring gendered inequalities that relegate more women than men to unpaid domestic work serve to structure and justify the concentration of women in this paid domestic work and its devaluation. What immigrant women from professional and working-class backgrounds had in common that shaped their eventual location in personal support was the marginal place of their nation of origin in the global economy vis-à-vis the United States, Canada, and by extension Britain. Gendered and racialized migration shaped the location of immigrant workers in North America, but their entry into personal support had as much to do with dynamics in the local labor markets of Toronto and Los Angeles, namely the intersection of racialization, gendering, ageism, and precarious employment, supported by the state. Social networks certainly opened up jobs to immigrant workers with few other options, but these jobs were precarious.

scholarly journals The Causes and Consequences of Wal-Mart's Growth

2007 ◽  
Vol 21 (3) ◽  
pp. 177-198 ◽  
Author(s):  
Emek Basker
Keyword(s):  
Labor Markets ◽  
Global Economy ◽  
The United States ◽  
Economic Effects ◽  
Local Labor Markets ◽  
Product Selection ◽  
Policy Issues ◽  
Consumer Prices ◽  
Private Employer ◽  
State And Local

Wal-Mart is the largest retailer and the largest private employer in the United States. The competitive pressures created by large retailers have long been controversial, and Wal-Mart's growth has raised concerns about its economic impact on workers, communities, and competitors. This paper aims to dispel some of the myths regarding Wal-Mart and to replace them with a systematic accounting of what is known about Wal-Mart's impact on the U.S. and global economy. The paper begins by exploring the source of Wal-Mart's competitive advantage. It then examines some of the economic effects of Wal-Mart: how Wal-Mart stores affect local labor markets, consumer prices, product selection, local and global competitors, and suppliers. I then turn to Wal-Mart's interaction with public policy issues in matters of global trade as well as state and local legislation on wages, benefits, zoning, and subsidies.

scholarly journals Modern Macroeconomics in Practice: How Theory Is Shaping Policy

2006 ◽  
Vol 20 (4) ◽  
pp. 3-28 ◽  
Author(s):  
V. V Chari ◽  
Patrick J Kehoe
Keyword(s):  
United States ◽  
Economic Theory ◽  
Labor Markets ◽  
Inflation Targeting ◽  
The United States ◽  
Income Taxes ◽  
Policy Changes ◽  
Capital Income ◽  
Macroeconomic Theory

Over the last three decades, macroeconomic theory and the practice of macroeconomics by economists have changed significantly—for the better. Macroeconomics is now firmly grounded in the principles of economic theory. We focus on the role of economic theory in shaping policy. Over the last several decades, the United States and other countries have undertaken a variety of policy changes that are precisely what macroeconomic theory of the last 30 years suggests. The evidence that theoretical advances have had a significant effect on the practice of policy is often hard to see for policymakers and advisers involved in the hurly-burly of day-to-day policymaking, but easy to see if one steps back and takes a longer-term perspective. Examples of the effects of theory on the practice of policy include increased central bank independence; adoption of inflation targeting and other rules to guide monetary policy; increased reliance on consumption and labor taxes instead of capital income taxes; and increased awareness of the costs of policies that distort labor markets.

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