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Minimum wage effects on employment, substitution, and the teenage labor supply: Evidence from personnel data

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  • Laura Giuliano

    ()
    (Department of Economics, University of Miami)

Abstract

Using personnel data from a large U.S. retail firm with more than 700 stores nationwide, this study examines the firm’s response to the 1996 federal minimum wage increase. First, increases in average wages had negative, but statistically insignificant effects on overall employment. Second, however, increases in the relative wages of teenagers led to significant increases in the relative employment of teenagers, and especially of more productive teenagers from affluent ZIP codes. This second result is consistent with models that link labor demand to labor market participation, and in particular suggests informational asymmetries may be important in the teenage labor market.

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Bibliographic Info

Paper provided by University of Miami, Department of Economics in its series Working Papers with number 2010-5.

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Length: 52 pages
Date of creation: Sep 2009
Date of revision:
Publication status: Published
Handle: RePEc:mia:wpaper:2010-5

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References

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  1. David Card, 1992. "Using regional variation in wages to measure the effects of the federal minimum wage," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 46(1), pages 22-37, October.
  2. Allegretto, Sylvia & Dube, Arindrajit & Reich, Michael, 2010. "Do Minimum Wages Really Reduce Teen Employment? Accounting for Heterogeneity and Selectivity in State Panel Data," Institute for Research on Labor and Employment, Working Paper Series qt7jq2q3j8, Institute of Industrial Relations, UC Berkeley.
  3. V. Bhaskar & Ted To, 1996. "Minimum Wages for Ronald McDonald Monopsonies: A Theory of Monopsonistic Competition," Labor and Demography 9603001, EconWPA, revised 21 May 1996.
  4. David Neumark & William Wascher, 2006. "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research," NBER Working Papers 12663, National Bureau of Economic Research, Inc.
  5. David Card & Alexandre Mas & Enrico Moretti & Emmanuel Saez, 2010. "Inequality at Work: The Effect of Peer Salaries on Job Satisfaction," NBER Working Papers 16396, National Bureau of Economic Research, Inc.
  6. David Neumark & William Wascher, 2007. "Does a Higher Minimum Wage Enhance the Effectiveness of The Earned Income Tax Credit?," NBER Working Papers 12915, National Bureau of Economic Research, Inc.
  7. Portugal, Pedro & Cardoso, Ana Rute, 2002. "Disentangling the Minimum Wage Puzzle: An Analysis of Worker Accessions and Separations," IZA Discussion Papers 544, Institute for the Study of Labor (IZA).
  8. Addison, John T. & Blackburn, McKinley L. & Cotti, Chad, 2008. "The Effect of Minimum Wages on Wages and Employment: County-Level Estimates for the United States," IZA Discussion Papers 3300, Institute for the Study of Labor (IZA).
  9. Arindrajit Dube & T. William Lester & Michael Reich, 2010. "Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 945-964, November.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Raising the Minimum Wage to $9 Would Harm Most Vulnerable Job Seekers
    by James Sherk in The Foundry on 2013-04-12 17:00:46
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Cited by:
  1. Alan Manning, 2010. "Imperfect competition in the labour market," LSE Research Online Documents on Economics 28729, London School of Economics and Political Science, LSE Library.
  2. John Schmitt, 2013. "Why Does the Minimum Wage Have No Discernible Effect on Employment?," CEPR Reports and Issue Briefs 2013-04, Center for Economic and Policy Research (CEPR).
  3. John T. Addison & McKinley L. Blackburn & Chad D. Cotti, 2013. "Minimum Wage Increases in a Recessionary Environment," GEMF Working Papers 2013-08, GEMF - Faculdade de Economia, Universidade de Coimbra.
  4. Kemal Kizilca & João Cerejeira & Miguel Portela & Carla Sá, 2010. "Minimum wage, fringe benefits, overtime payments and the gender wage gap," NIPE Working Papers 34/2010, NIPE - Universidade do Minho.
  5. Dube, Arindrajit, 2013. "Minimum Wages and Aggregate Job Growth: Causal Effect or Statistical Artifact?," IZA Discussion Papers 7674, Institute for the Study of Labor (IZA).

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