Heterogeneous Impact of the Minimum Wage: Implications for Changes in Between- and Within-Group Inequality

Abstract

In the United States, most of the workers who earn at or below the minimum wage are either less educated, young, orfemale. We examine the extent to which the minimum wage influences the wage differential among workers with different observed characteristics and the wage differential among workers with the same observed characteristics. Our results suggest that changes in the real value of the minimum wage account in part for the patterns of changes in education, experience, and gender wage differentials and for most of the changes in within-group wage differentials for workers with lower levels of experience.