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Time-Series Evidence of the Effect of the Minimum Wage on Youth Employment and Unemployment

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  • Charles Brown
  • Curtis Gilroy
  • Andrew Kohen

Abstract

Our updated estimates indicate that a 10 percent increase in the federal minimum wage (or the coverage rate) would reduce teenage (16-19) employment by about 1 percent, which is at the lower end of the range of estimates from previous studies. Because of substantial labor force withdrawal, the unemployment effects are practically zero. These minimum wage effects differ very little by sex, and there is no strong evidence that the effects vary by race. The study also finds a significant-albeit small-unemployment impact for young adults (20-24) and examines the consequences of numerous alternative statistical and mathematical specifications of the estimating model.

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Bibliographic Info

Article provided by University of Wisconsin Press in its journal Journal of Human Resources.

Volume (Year): 18 (1983)
Issue (Month): 1 ()
Pages: 3-31

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Handle: RePEc:uwp:jhriss:v:18:y:1983:i:1:p:3-31

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Web page: http://jhr.uwpress.org/

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  1. Mincer, Jacob, 1976. "Unemployment Effects of Minimum Wages," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages S87-104, August.
  2. Daniel S. Hamermesh, 1981. "Minimum Wages and the Demand for Labor," NBER Working Papers 0656, National Bureau of Economic Research, Inc.
  3. Edward M. Gramlich, 1976. "Impact of Minimum Wages on Other Wages, Employment, and Family Incomes," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 7(2), pages 409-462.
  4. Moore, Thomas Gale, 1971. "The Effect of Minimum Wages on Teenage Unemployment Rates," Journal of Political Economy, University of Chicago Press, vol. 79(4), pages 897-902, July-Aug..
  5. Brown, Charles & Gilroy, Curtis & Kohen, Andrew, 1982. "The Effect of the Minimum Wage on Employment and Unemployment," Journal of Economic Literature, American Economic Association, vol. 20(2), pages 487-528, June.
  6. Adie, Douglas K, 1973. "Teen-Age Unemployment and Real Federal Minimum Wages," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages 435-41, Part I, M.
  7. Ragan, James F, Jr, 1977. "Minimum Wages and the Youth Labor Market," The Review of Economics and Statistics, MIT Press, vol. 59(2), pages 129-36, May.
  8. John F. Boschen & Herschel I. Grossman, 1981. "The Federal Minimum Wage, Inflation, and Employment," NBER Working Papers 0652, National Bureau of Economic Research, Inc.
  9. Betsey, Charles L & Dunson, Bruce H, 1981. "Federal Minimum Wage Laws and the Employment of Minority Youth," American Economic Review, American Economic Association, vol. 71(2), pages 379-84, May.
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