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The Effects Of Increasing The Minimum Wage On Prices: Analyzing The Incidence Of Policy Design And Context, Daniel Macdonald, Eric Nilsson

Upjohn Institute Working Papers

We analyze the price pass-through effect of the minimum wage and use the results to provide insight into the competitive structure of low-wage labor markets. Using monthly price series, we find that the pass-through effect is entirely concentrated on the month that the minimum wage change goes into effect, and is much smaller than what the canonical literature has found. We then discuss why our results differ from that literature, noting the impact of series interpolation in generating most of the previous results. We then use the variation in the size of the minimum wage change to evaluate the competitive …