The UC regents received a $570,000 grant to conduct a study that will evaluate the effects of the higher minimum wage ordinance in the Los Angeles metropolitan region. The research initiative will be led by Edward Leamer, UCLA Anderson School of Management Distinguished Professor, Chauncey J. Medberry Chair in Management and UCLA Anderson Forecast director. Leamer will collaborate with Till von Wachter and Frederick Zimmerman, faculty members from the Department of Economics and School of Public Health at UCLA, and Jerry Nickelsburg of UCLA Anderson School.

While increases in minimum wages are occurring in many locations, the Los Angeles experiment could be one of the most informative, since the city has an unusually large share of geographically concentrated low-wage workers, and the legislated increases in the minimum wage are projected to cover a greater fraction of workers here than in any other jurisdiction. The research will study the impact of the local minimum wage increase on a broad set of effects, including wage and employment levels but also product prices and health outcomes.

“City governments are currently pushing minimum wages up significantly, based on the expectation that every increment to the minimum wage is favorable,” said Leamer. “But the higher the level of the minimum wage, the greater is the risk of adverse employment effects, and our goal is to track the impacts over time so that the City of Los Angeles can be fully aware of both the favorable and unfavorable effects.”

Funding for the study was provided by a grant from the Laura and John Arnold Foundation, which is focused on addressing some of the nation’s most persistent challenges through the use of research and evidence.

The study will be conducted during a three-year period. Findings will be released in the winter of 2018.