Researcher in Focus: Arin Dube

The minimum wage has been a live issue in public policy debates over the past year or so. And the attention paid to the issue will most likely continue throughout 2014. Without doubt, the political arguments will result in opponents and proponents of raising the nation’s wage floor arguing about the economic impacts with each other, particularly about its effect on employment growth.

Instead of trying to resolve this debate for you, we thought it would be more interesting to flag one researcher who has done considerable work on the minimum wage.

Below is an overview of the work of Arin Dube, one of the most prominent researchers on the economics of minimum wage. If you want just a broad introduction to the economics of the minimum wage, the first two sections will suffice. But if you want to read in depth about the economic arguments, you may be more interested in the last two sections.

Arindrajit Dube, associate professor of economics at the University of Massachusetts, Amherst; Research Fellow, IZA; Research Advisory Board member, Washington Center for Equitable Growth.

A Layman’s Introduction:

“The Minimum We Can Do,” November 30, 2013

• In a blog post for the New York Times’s The Great Divide series, Dube surveys the past, present and future of the minimum wage in the United States

“Minimum Wage 101,” The American Prospect, February 14, 2013

• Dube discusses the minimum wage with an emphasis on its policy effectiveness in an interview with Mike Konczal.

A Literature Review for the Policy-Minded:

Statement before the U.S. Senate Committee on Health, Education, Labor and Pensions, Hearing on “Keeping up with a Changing Economy: Indexing the Minimum Wage,” March 14, 2013

• Dube’s prepared remarks provide a good and accessible literature review of the academic research.

Select Papers:

“Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties,” Arindrajit Dube, T. William Lester, and Michael Reich, The Review of Economics and Statistics, 2010

• David Card and Alan Krueger’s 1994 paper may be more widely cited in the popular press, but Dube’s paper with Lester and Reich is the best piece of evidence that moderate increases in the minimum wage don’t significantly affect employment. Instead of looking at the changes along one border, like Pennsylvania and New Jersey, Dube, Lester, and Reich look at the difference in employment growth across every pair of counties with different minimum wages from 1990 to 2006. This generalized version finds no significant disemployment effect.

“Minimum Wage Shocks, Employment Flows and Labor Market Frictions,” Arindrajit Dube, T. William Lester, and Michael Reich, Working Paper, 2013

• This paper focuses on the effect of a minimum wage increase on employment flows such as hires, quits and layoffs instead of net employment as most research does. The authors find that labor turnover falls quite a bit for affected workers. This result supports a view of a labor market where the cost of looking for a job or a worker is considerable.

“Minimum Wages and the Distribution of Family Incomes,” Arindrajit Dube, Working Paper, 2013

• In this paper, Dube attempts to quantify the effect of the minimum wage on family incomes. Specifically, he finds that an increase in the minimum wage would reduce poverty. According to Dube’s preferred model, a 10 percent increase in the minimum wage would reduce the poverty rate by 2.4 percent.

The Best Criticism:

There is disagreement on many of the issues Dube has researched, so anyone interested in the area should read the disagreeing papers. Below is the paper we think best responds to one aspect of Dube’s research.

“Effects of the Minimum Wage on Employment Dynamics,” Jonathan Meer and Jeremy West, Working Paper, 2013

• Meer and West argue that Dube’s preferred method of analyzing the impact of the minimum wage on employment, including a control trend, makes his estimates too imprecise. Using an alternate approach, they agree that an increase in the minimum wage doesn’t decrease employment, but the wage increase does slow down employment growth.

Nick Bunker is a Research Associate at the Washington Center for Equitable Growth.