Stephen Bazen () (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales - CNRS : UMR6579) Julie Le Gallo (Laboratoire d'Analyse et de Techniques Economiques - Aucune, GREThA - Groupe de Recherche en Economie Théorique et Appliquée - CNRS : UMR5113 - Université Montesquieu - Bordeaux IV, LEG - Laboratoire d'Economie et de Gestion - CNRS : UMR5118 - Université de Bourgogne, CRESE - Centre de REcherche sur les Stratégies Economiques - Université de Franche-Comté)
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The "new economics of the minimum wage" is based on the findings from case studies that minimum wages had no effect on employment and may even have increased it. This conclusion is at odds with the findings of earlier studies and those of a number of more recent studies which find a statistically significant negative effect on teenage employment. These conflicting results constitute a puzzle. We find that this is due to minimum wage hikes implemented at the state-level having no negative effects on teenage employment during the 1980s and 1990s, while the federal hikes of the 1990s did. In states without their own minimum wages, the decline in the relative value of the federal minimum wage during the 1980s gave rise to an increase in low-wage employment that was subsequently checked and reversed by the federal hikes in the early 1990s.
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Paper provided by HAL in its series Working Papers with number
halshs-00382509_v1.
Length: Date of creation: 07 May 2009 Date of revision: Handle: RePEc:hal:wpaper:halshs-00382509_v1
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