Does a One-Size-Fits-All Minimum Wage Cause Financial Stress for Small Businesses?

  title={Does a One-Size-Fits-All Minimum Wage Cause Financial Stress for Small Businesses?},
  author={Sudheer Chava and Alexander Oettl and Manpreet Singh},
  journal={NBER Working Paper Series},
Do increases in federal minimum wage impact the financial health of small businesses? Using intertemporal variation in whether a state’s minimum wage is bound by the federal rate and credit-score data for approximately 15.2 million establishments for the period 1989–2013, we find that increases in the federal minimum wage worsen the financial health of small businesses in the affected states. Small, young, labor-intensive, minimum-wage sensitive establishments located in the states bound to the… 

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