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Labor Market Institutions and the Distribution of Wages: The Role of Spillover Effects

Nicole M. Fortin^1,2; Thomas Lemieux²; Neil Lloyd²

¹ National Bureau of Economic Research · ² University of British Columbia

This paper examines the role of spillover effects of minimum wages and threat effects of unionization in changes in wage inequality in the United States between 1979 and 2017. A distribution regression framework is introduced to estimate both types of spillover effects. Threat effects double the contribution of deunionization to the increase in male wage inequality. Spillover effects magnify the explanatory power of declining minimum wages to two-thirds of the increase in inequality at the bottom end of the female wage distribution.

DOI

10.1086/712923

Volume

39 (S2)

Pages

S369-S412

Language

en

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