Recent Research: How minimum wage increases shape the STEM workforce pipeline

College is often the time when students discover which career path they want to pursue, through coursework, internships, and hands-on experiences. New research examining state minimum wage increases, however, shows how budget pressures can disrupt access to these formative opportunities and ultimately affect who enters STEM careers.  

The researchers analyzed administrative data from research grants at 32 U.S. universities between 2001 and 2019, tracking how labs adjusted staffing when state minimum wage changed. They found that in the year following a minimum wage increase, labs reduced undergraduate research assistant employment by 7.4%. Students who were in college when these increases occurred graduated having worked 18.1% fewer quarters in labs compared to what they may have experienced otherwise.  

The employment effects were not uniform across all fields. Biology and psychology labs showed larger reductions, as did labs funded by NIH compared to those funded by NSF. Labs that relied more heavily on undergraduate workers (where undergraduates accounted for more than 10% of the total work) saw larger cuts, whereas labs less dependent on undergraduate labor were largely unaffected.  

To understand how these employment changes affected student career paths, the researchers linked lab employment records with post-graduation outcomes for over 28,000 students. Students who were in college when wages increased worked fewer quarters in labs overall, with the most substantial reductions occurring if the wage increase happened during their first or second year. The researchers found that each additional quarter of lab experience increased the likelihood of pursuing a doctoral degree by 7-10 percentage points and the probability of working in the life sciences by about two percentage points. Based on these estimates, the researchers calculate that approximately 500 fewer students in their sample pursued doctoral degrees as a result of the wage-related reductions in lab experience.  

Despite reduced undergraduate employment, research output (as measured by publication rates) remained stable in the short term. The employment of graduate students, postdocs, and research staff also remained generally stable, likely reflecting different funding mechanisms and the difficulty of adjusting these positions in the short term. Notably, undergraduates supported by Federal Work Study, which subsidizes wages for students with demonstrated financial need, were also more likely to continue working in labs after minimum wage increases. The cost subsidy appeared to help labs maintain these positions even as wages rose.

The study has some limitations, however. For example, the study does not track where displaced undergraduate students may have gone. The researchers could not determine whether they found other ways to work with research faculty, moved to a different campus job, or left university employment entirely. Additionally, the analysis focuses on employment dynamics only within the year following minimum wage changes, so whether undergraduate employment levels eventually recovered as labs secured additional grant funding or made other adjustments remains unclear. Even if undergraduate employment rates were to return or increase in the long term, the career effects could persist, since students only have a four-year window for their undergraduate research experience.

The findings highlight how budget constraints in research settings create unintended consequences for workforce development. Early exposure to research shapes STEM career trajectories, but that access can be disrupted by cost pressures and unpredicted funding uncertainties. For universities seeking to provide undergraduates with research experience, this study’s results suggest the value of funding mechanisms that can absorb unexpected increases in labor costs without reducing student opportunities.

This page was prepared by SSTI using Federal funds under award ED22HDQ3070129 from the Economic Development Administration, U.S. Department of Commerce. The statements, findings, conclusions, and recommendations are those of the author(s) and do not necessarily reflect the views of the Economic Development Administration or the U.S. Department of Commerce.