Jonathan Meer, Texas AM University

The Minimum Wage’s Effects on the Nonprofit Sector Employment


Abstract:

 
The nonprofit sector’s ability to absorb increases in labor costs differs from the private sector in a number of ways. We analyze how nonprofits are affected by changes in the minimum wage utilizing data from the Bureau of Labor Statistics and the Internal Revenue Service, linked to state minimum wages. We examine changes in reported employment and volunteering, as well as other financial statements such as revenues and expenses. The results from both datasets show a negative impact on employment, driven primarily by states with large statutory minimum wage increases. We observe a similar impact on the number of establishments. We find mixed evidence on other outcomes, such as revenue and expenses.   
 
Jonathan Meer’s research focuses on charitable giving and the economics of education. His recent work examines whether fundraising creates new giving, how Teach for America teachers impact college-going among low-income students, and how the interaction between teacher and student gender affects student performance. He is a Private Enterprise Research Center professor and a Research Associate of the National Bureau of Economic Research.

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