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Impacts of minimum wages on single mothers
October 16, 2018•12:00 pm – 1:30 pm
Using an event study framework, Godøy’s research documents a sharp rise in employment and earnings of single mothers after state minimum wage increases. Further, these effects can be shown to be concentrated among jobs that pay the minimum wage or slightly higher – high-wage employment remains unaffected. Panel models find the largest effects among mothers of preschool age children, while the effects on childless women are negligible. The results are consistent with a simple labor supply model in which single mothers of young children face large fixed costs of work in the form of childcare. Minimum wage increases then generate large participation effects.
Godøy’s research also analyzes downstream effects on fertility. Economic theory suggests that higher female wages may reduce fertility by raising the opportunity cost of children (who are relatively time intensive). Consistent with this theory, Godøy’s research documents negative effects of minimum wage policies on the fertility rates of single mothers.
Anna Godøy is a labor economist and postdoctoral scholar at the Center on Wage and Employment Dynamics (CWED) at the Institute for Research on Labor and Employment at the University of California, Berkeley, where she works on research related to the minimum wage. Prior to joining CWED, Anna was a senior research fellow at the Institute for Social Research in Oslo, Norway. She received a PhD in economics from the University of Oslo in 2014.