505: Annotated Bibliography. Policy selected: Minimum Wage

Annotated Bibliography
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Annotated Bibliography
Policy selected: Minimum Wage
Addison, JT., & Blackburn, ML 1999, Minimum Wages and Poverty. Industrial & Labor Relations Review, 52(3), 393
Qualitative article: the authors of this article employ a reduced-form approach in studying the link between changes in the minimum wage and the levels of employment of the young adults and teens. Both authors are Professors in the Department of Economics at the University of South Carolina. According to Addison and Blackburn (1999), earlier researches on the effects of minimum wages on poverty have revealed that minimum wages actually decrease the rates of poverty, with simulated effects which seem to be rather strong. Different from simulation treatments, the approach employed by Addison and Blackburn (1999) minimizes the need for building a restrictive and unrealistic model to evaluate the effects of minimum wages on poverty. Their findings show that the rates of poverty amongst the groups that are most likely to be affected by minimum wage raises are at least twice over those of prime-age people. There is proof of a poverty-reducing effect of minimum wages for junior high dropouts and teenagers; this proof is obtained from reactions to minimum wages which were raised in the ‘90s. Similarly, a study conducted by of Neumark and Wascher (2002) cited below showed that the minimum wage increases the chances of poor families to escape poverty.
Brown, C., Gilroy, C., & Kohen, A 1982, The Effect of the Minimum Wage on Employment and Unemployment. Journal of Economic Literature, 20, 487-528
Qualitative article. Charles Brown is a researcher at the National Bureau of Economic Research and a professor at the University of Maryland. Curtis Gilroy is a researcher at the U.S. Army Research Institute, and Andrew Cohen is a professor at James Madison University. In this article, they state that the most fundamental minimum wage model on unemployment and employment centers on one competitive labor market with uniform workers whose wage would be lower than the legally defined minimum wage. If the rates of employment would increase, the decrease in employment predicted by the simple demand-supply model can take the form of a lower employment growth rate and not an actual drop in the number of persons employed. A popular exemption to the conclusion that minimum wages would reduce the rate of joblessness is the monopsony case. A minimum wage that is between the original monopsony and the competitive wage would increase the rates of employment. A 10% raise in the minimum wage is approximated to bring about roughly 1%-3% decrease in total employment. This finding is somewhat similar to that of Partridge and Partridge (1999) cited below who found that in increase in minimum wage leads to an increase in the rates of long-term joblessness.
Even, WE., & Macpherson, DA 2003, The Wage and Employment Dynamics of Minimum Wage Workers. Southern Economic Journal, 69(3), 676-690
Qualitative article: William Even is a professor in the Department of Economics at Miami University whilst David Macpherson is a professor in the Department of Economics at Florida State University. In their study...