Quarterly Journal of Economics Vol. 140 No. 3 2025
The Race Between Education, Technology, and the Minimum Wage
Abstract
What is the effect of the real minimum wage on wages and inequality? I develop a theory that nests the race between education and technology. The theory predicts that the effect of changes in minimum wages is initially small but grows over time. I present empirical evidence of these dynamic effects: the elasticity of real wages grows substantially over a three-year period. I show that minimum wages help rationalize a considerable decline in real wages of low-education workers in the 1980s and play a role in shaping the evolution of the U.S. college premium.
- DOI
- 10.1093/qje/qjaf014
- Volume
- 140
- Issue
- 3
- Pages
- 1857-1899
- Language
- en
- Sources
- bibtex:phds-export.bib crossref openalex