Minimum Wages and Teen Employment: A Spatial Panel Approach
20 Pages Posted: 4 Sep 2011
Abstract
The authors employ spatial econometrics techniques and Annual Averages data from the U.S. Bureau of Labor Statistics for 1990-2004 to examine how changes in the minimum wage affect teen employment. Spatial econometrics techniques account for the fact that employment is correlated across states. Such correlation may exist if a change in the minimum wage in a state affects employment not only in its own state but also in other, neighboring states. The authors show that state minimum wages negatively affect teen employment to a larger degree than is found in studies that do not account for this correlation. Their results show a combined direct and indirect effect of minimum wages on teen employment to be -2.1% for a 10% increase in the real effective minimum wage. Ignoring spatial correlation underestimates the magnitude of the effect of minimum wages on teen employment.
Keywords: minimum wage, teen employment, spatial econometrics
JEL Classification: J08, J21, J38, J48, C31
Suggested Citation: Suggested Citation
Do you want regular updates from SSRN on Twitter?
Recommended Papers
-
Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties
By Arindrajit Dube, T. William Lester, ...
-
Does a Higher Minimum Wage Enhance the Effectiveness of the Earned Income Tax Credit?
By David Neumark and William Wascher
-
By David Neumark and William Wascher
-
By Sylvia A. Allegretto, Arindrajit Dube, ...
-
Identifying Minimum Wage Effects: New Evidence from Monthly CPS Data
-
By John T. Addison, Mckinley L. Blackburn, ...
-
Revisiting the Minimum Wage-Employment Debate: Throwing Out the Baby with the Bathwater?
By David Neumark, John Michael Ian S Salas, ...
-
Revisiting the Minimum Wage-Employment Debate: Throwing Out the Baby with the Bathwater?
By David Neumark, John Michael Ian S Salas, ...
-
Do Frictions Matter in the Labor Market? Accessions, Separations and Minimum Wage Effects
By Arindrajit Dube, T. William Lester, ...