Gray Wages: The Employment Effects of Minimum Wage Increases on Older Workers

Abstract

While the minimum wage literature has extensively studied effects on teenagers and young adults, older workers aged 65 and above represent a growing but understudied segment of the low-wage workforce. Using American Community Survey data from 2010-2022 and exploiting staggered state minimum wage increases above the federal \$7.25 floor, I estimate the effect of minimum wage policy on employment among elderly workers. Using the Callaway-Sant'Anna (2021) difference-in-differences estimator to address staggered treatment timing, I find that minimum wage increases reduce employment among low-education elderly workers (those with high school diploma or less) by approximately 1.2 percentage points, representing a 4% decline from baseline. Effects are concentrated among workers aged 65-74. High-education elderly workers show no employment response, consistent with the policy binding only for workers near the minimum wage. These findings suggest that while minimum wage increases benefit workers who retain employment, elderly workers—who face limited job mobility and often work part-time—may bear disproportionate disemployment costs.