Understanding the incidence of minimum wage increases
This project aims to understand how firms accommodate increases in the minimum wage by using granular compensation data that the research team will construct by merging the individual tax returns of all employees and contractors of a firm to the business tax return of the firm. These data allow for an exploration of how changes in the minimum wage affect the full distribution of employee and contractor compensation within affected firms, including changes in employment and income. They will look at which kinds of workers, if any, lose or gain employment following increases in the minimum wage and how the incomes of covered and uncovered workers, as well as firm owners, are affected. Notably, the 17-year data panel will enable them to study dozens of minimum wage increases legislated at the federal, state, and substate level.