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Long-Term Impact of Youth Minimum Wages: Evidence from Two Decades of Individual Longitudinal Data

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  • Cardoso, Ana Rute

    ()
    (IAE Barcelona (CSIC))

Abstract

This paper quantifies the long-run impact of exposure to youth minimum wages and sheds light on its mechanisms. It uses remarkable longitudinal data spanning for twenty years and explores legislative changes that define groups of teenagers exposed for different durations. After controlling for the contemporaneous impact of the minimum wage, its long-run impact translates into: an overall wage premium, consistent with an upgrading in the quality of jobs offered; a flatter tenure-earnings profile, consistent with lower initial investment in firm-specific training. Interestingly, the overall wage premium increases with exposure and the tenure-earnings profile is flatter the longer the exposure.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4236.

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Length: 42 pages
Date of creation: Jun 2009
Date of revision:
Handle: RePEc:iza:izadps:dp4236

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Related research

Keywords: skill formation; human capital investment; on-the-job-training; career; long-term; linked employer-employee data;

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References

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  17. David Neumark & William Wascher, 1995. "The Effects of Minimum Wages on Teenage Employment and Enrollment: Evidence from Matched CPS Surveys," NBER Working Papers 5092, National Bureau of Economic Research, Inc.
  18. Ronald G. Ehrenberg & Alan J. Marcus, 1982. "Minimum Wages and Teenagers' Enrollment-Employment Outcomes: A Multinomial Logit Model," Journal of Human Resources, University of Wisconsin Press, vol. 17(1), pages 39-58.
  19. Adam J. Grossberg & Paul Sicilian, 1999. "Minimum Wages, On-the-Job Training, and Wage Growth," Southern Economic Journal, Southern Economic Association, vol. 65(3), pages 539-556, January.
  20. Michele Campolieti & Tony Fang & Morley Gunderson, 2003. "How Minimum Wages Affect Schooling-Employment Outcomes in Canada, 1993-1999," Journal of Labor Research, Transaction Publishers, vol. 26(3), pages 533-545, August.
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