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Minimum wages and employment

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Author Info

  • Manfred Keil
  • Donald Robertson
  • James Symons
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    Abstract

    This paper investigates the effect of minimum wages on employment using a panel of US state-based data. We estimate a minimalist dynamic version of the specification implied by neo-classical theory. We find statistically and economically significant effects of minimum wages on youth employment. Unlike many other studies we find also significant effects on aggregate state employment. These results re-establish the conventional wisdom as existing before the work of Card-Krueger-Katz. The paper meets the methodological criticisms of this sort of panel study made by CKK. An important econometric innovation in this paper is to produce estimates allowing for cross-sectional correlation, which offers unbiased inference and potential efficiency gains.

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    File URL: http://eprints.lse.ac.uk/20119/
    File Function: Open access version.
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    Bibliographic Info

    Paper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 20119.

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    Length: 25 pages
    Date of creation: Jun 2001
    Date of revision:
    Handle: RePEc:ehl:lserod:20119

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    Web page: http://www.lse.ac.uk/
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    Related research

    Keywords: Minimum wages; panel data; cross sectional correlation; factor analysis;

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    Cited by:
    1. Jellal, Mohamed, 2012. "Maroc salaire minimum emploi et pauvreté
      [Morocco minimum wage employment and poverty]
      ," MPRA Paper 38491, University Library of Munich, Germany.
    2. Pia M. Orrenius & Madeline Zavodny, 2008. "The effect of minimum wages on immigrants' employment and earnings," Working Papers 0805, Federal Reserve Bank of Dallas.
    3. Calavrezo, Oana & Pelek, Selin, 2011. "Qui sont les salariés payés au niveau du salaire minimum? Une analyse empirique à partir de données turques," GIAM Working Papers 11-2, Galatasaray University Economic Research Center, revised 13 Feb 2011.

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