Raising the Floor Without Compressing Inequality: Minimum Wage Thresholds and Female Labor Participation in U.S. States

Ziyun Wang; Zhe Li

doi:10.62177/chst.v3i2.1198

Authors

Ziyun Wang Hainan Vocational University of Science and Technology
Zhe Li City University of Macau

DOI:

https://doi.org/10.62177/chst.v3i2.1198

Keywords:

Minimum Wage, Social Inequality, Labor Force Participation, Event Study, Labor Markets

Abstract

This study examines the impact of high minimum wage policies on labor markets and inequality, using the first instance a U.S. state reached a $10/hour minimum wage as a discrete shock. Analyzing 2010–2024 state-level data (excluding 2020) with two-way fixed effects and various DID estimators, it finds that while the policy had no significant average effect on state-level inequality or poverty, it significantly improved labor outcomes for prime-age women (20–64). Specifically, their labor force participation rose by 2.10 percentage points, the employment-to-population ratio increased by 2.73 points, and unemployment fell by 1.86 points. However, these effects were sensitive to specification, attenuating with population weighting and state trend controls, and event studies revealed potential pre-trends for female participation, suggesting these results may be influenced by existing structural trends or policy anticipation.

Downloads

Download data is not yet available.

References

Card, D., & Krueger, A. B. (1993). Minimum wages and employment: A case study of the fast food industry in New Jersey and Pennsylvania.

Dube, A., Lester, T. W., & Reich, M. (2010). Minimum wage effects across state borders: Estimates using contiguous counties. The review of economics and statistics, 92(4), 945-964.

Cengiz, D., Dube, A., Lindner, A., & Zipperer, B. (2019). The effect of minimum wages on low-wage jobs. The Quarterly Journal of Economics, 134(3), 1405-1454.

Neumark, D., & Shirley, P. (2022). Myth or measurement: What does the new minimum wage research say about minimum wages and job loss in the United States?. Industrial Relations: A Journal of Economy and Society, 61(4), 384-417.

Neumark, D. (2024). The effects of minimum wages on (almost) everything? A review of recent evidence on health and related behaviors. Labour, 38(1), 1-65.

Lehner, L., Massenbauer, H., Parolin, Z., & Pintro Schmitt, R. (2025). The Effects of Minimum Wage Increases on Poverty and Food Hardship.

Blau, F. D., Cohen, I., Comey, M. L., Kahn, L., & Boboshko, N. (2023). The minimum wage and inequality between groups (No. w31725). National Bureau of Economic Research.

De Chaisemartin, C., & d’Haultfoeuille, X. (2020). Two-way fixed effects estimators with heterogeneous treatment effects. American economic review, 110(9), 2964-2996.

Goodman-Bacon, A. (2021). Difference-in-differences with variation in treatment timing. Journal of econometrics, 225(2), 254-277.

Sun, L., & Abraham, S. (2021). Estimating dynamic treatment effects in event studies with heterogeneous treatment effects. Journal of econometrics, 225(2), 175-199.

Callaway, B., & Sant’Anna, P. H. (2021). Difference-in-differences with multiple time periods. Journal of econometrics, 225(2), 200-230.

Federal Reserve Bank of St. Louis. (n.d.). Federal minimum wage for nonfarm workers for the United States [Data set]. FRED. Retrieved March 1, 2026, from https://fred.stlouisfed.org/series/FEDMINNFRWG.

Federal Reserve Bank of St. Louis. (n.d.). Consumer price index for all urban consumers: All items in U.S. city average [Data set]. FRED. Retrieved March 1, 2026, from https://fred.stlouisfed.org/series/CPIAUCSL

Federal Reserve Bank of St. Louis. (n.d.). State minimum wage annual series [Data set]. FRED. Retrieved March 1, 2026, from https://fred.stlouisfed.org/

U.S. Census Bureau. (n.d.). American Community Survey (ACS) API documentation and data portal. Retrieved March 1, 2026, from https://api.census.gov/data.html

U.S. Census Bureau. (2024). *ACS 1-year API (2024) data portal*. Retrieved March 1, 2026, from https://api.census.gov/data/2024/acs/acs1