Teaching the Minimum Wage in Econ 101 in Light of the New Economics of the Minimum Wage

Abstract

The author argues that the recent controversy over the effect of the minimum wage on employment offers an opportunity for teaching introductory economics. Research findings on the minimum wage could be used to motivate alternative models of the labor market, such as monopsony and search models, and to teach students how economists test hypotheses with data.

Key Words:

• minimum wage
• monopsony
• natural experiment

Additional information

Notes on contributors

Alan B. Krueger

Alan B. Krueger is the Bendheim professor of economics and public affairs at Princeton University (e-mail: [email protected]). The author has benefited from discussions with Alan Manning, Ian McDonald, Tim Taylor, Diane Whitmore, and Justin Wolfers. This article was written while the author was on leave at the Center for Advanced Study in the Behavioral Sciences at Stanford University.