The minimum wage, restaurant prices, and labor market structure
By: Daniel Aaronson, Eric French, James MacDonald.
Contributors: French, Eric.; MacDonald, James.; Federal Reserve Bank of Chicago. Research Dept.
Series: Working paper series ;; WP-2004-21; Working paper series (Federal Reserve Bank of Chicago. Research Dept. : Online) ;; WP-2004-21.
Publisher: Federal Reserve Bank of Chicago
Published: 2004
Place of publication: [Chicago, Ill.]
Language: eng
Format: Electronic resource
Subjects: Minimum wage; Restaurants -- Prices
Description: "Using both store-level and aggregated price data from the food away from home component of the Consumer Price Index survey, we show that restaurant prices rise in response to an increase in the minimum wage.  These results hold up when using several different sources of variation in the data.  We interpret these findings within a model of employment determination.  The model implies that minimum wage hikes cause employment to fall and prices to rise if labor markets are competitive but potentially cause employment to rise and prices to fall if labor markets are monopsonistic.  Therefore, our empirical results appear to provide evidence against the hypothesis that monopsony power is important for understanding the small observed employment responses to minimum wage changes"--Federal Reserve Bank of Chicago web site.
Notes: Includes bibliographical references.
Title from PDF file as viewed on 12/17/2004.
Also available in print.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.