prices

Author
Abstract

This paper examines the relationship between price growth and
skill intensity across 150 manufacturing industries between 1989
and 1995. There are two main findings. First, wage growth and
intermediate goods price increases are passed through to final
product prices roughly in proportion to their factor shares.
Second, product prices have grown relatively less in sectors that
more intensively utilize less-skilled labor. The latter finding
is consistent with the Stolper-Samuelson theory of expanded trade
with countries that are abundant in less-skilled workers, as well
as with some models of technological change.

Year of Publication
1997
Number
375
Date Published
01/1997
Publication Language
eng
Citation Key
8024
Krueger, A. . (1997). Labor Market Shifts and the Price Puzzle Revisited. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01bc386j21k (Original work published January 1997)
Working Papers
Abstract

Using data from a longitudinal survey of fast food restaurants in Texas, the authors examine
the impact of recent changes in the federal minimum wage on a low-wage labor market. The authors
draw three main conclusions. first. the survey results indicate that less than 5 percent of fast food
restaurants use the new youth subminimum wage even though the vast majority paid a starting wage
below the new hourly minimum wage immediately before it went into effect. Second, although some
restaurants increased wages by an amount exceeding that necessary to comply with higher minimum
wages in both 1990 and 1991, recent increases in the federal minimum wage have greatly compressed
the distribution of starting wages in the Texas fast food industry. Third, employment increased
relatively in those firms likely to have been most affected by the 1991 minimum wage increase, while
price changes appear to be unrelated to mandated wage changes. These employment and price
changes do not seem consistent with conventional views of the effects of increases in a binding
minimum wage.

Year of Publication
1992
Number
298
Date Published
02/1992
Publication Language
eng
Citation Key
Industrial and Labor Relations Review, Vol 46, No. 1, October, 1992
Krueger, A. ., & Katz, L. . (1992). The Effect of the Minimum Wage on the Fast Food Industry. Retrieved from http://arks.princeton.edu/ark:/88435/dsp013x816m62z (Original work published February 1992)
Working Papers