Panel Paper:
State Minimum Wage Increases and Self-Employment: Analysis of Heterogeneous Treatment Effects across Occupations
Friday, November 8, 2019
Plaza Building: Concourse Level, Governor's Square 17 (Sheraton Denver Downtown)
*Names in bold indicate Presenter
Previous empirical work on minimum wage has examined potential impacts of minimum wages on unemployment, however there may be other potential consequences for workers that cannot be observed in unemployment insurance rolls. Insofar as the minimum wage represents regulation in the labor market, employees and employers may alter their behavior in response to an increased state minimum wage, re-labelling work that was previously done by an employee as work done by an independent contractor. Building upon existing literature on employment protections and self-employment rates, this paper examines the impact of state minimum wage levels on the rate of self-employment. Using American Community Survey (ACS) data from 2000-2017 andoccupation and state fixed effects model, we exploit state-by-state variation in the minimum wage to examine the heterogeneous treatment effects of state minimum wage levels on the rates of self-employment across various occupations. We hypothesize that minimum wages result in increased rates of self-employment in typically lower-skillsectors characterized by less formal employee-employer relationships (such as construction, trucking and warehouse, and janitorial work) compared to lower-skill sectors characterized by more formal employee-employer relationships.
