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Minimum Wage Effects on Employment and School Enrollment

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Author Info
David Neumark
William Wascher

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Abstract

We argue in this paper that the focus on employment effects in recent studies of minimum wages ignores an important interaction between schooling, employment, and the minimum wage. To study these linkages, we estimate a conditional logit model of employment and enrollment outcomes for teenagers using state-year observations for the period 1977 to 1989. The results show a negative influence of minimum wages on school enrollment and a positive effect on the proportion of teens neither employed nor in school. We further suggest that our results are consistent with substitution by employers of higher- for lower-skilled teenagers, with the displaced teens ending up both out of work and out of school.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4679.

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Date of creation: Mar 1994
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Handle: RePEc:nbr:nberwo:4679

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Find related papers by JEL classification:
J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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  1. David Card, 1991. "Do Minimum Wages Reduce Employment? A Case Study of California, 1987-89," NBER Working Papers 3710, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Richard B. Freeman, 1982. "Economic Determinants of Geographic and Individual Variation in the Labor Market Position of Young Persons," NBER Chapters, in: The Youth Labor Market Problem: Its Nature, Causes, and Consequences, pages 115-154 National Bureau of Economic Research, Inc. [Downloadable!]
  3. David Card & Alan Krueger, 1993. "Minimum Wages and Employment: A Case Study of the Fast Food Industry in New Jersey and Pennsylvania," Working Papers 694, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
    Other versions:
  4. David Neumark & William Wascher, 1992. "Employment effects of minimum and subminimum wages: Panel data on state minimum wage laws," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 46(1), pages 55-81, October.
  5. Tauchen, George E, 1981. "Some Evidence on Cross-Sector Effects of the Minimum Wage," Journal of Political Economy, University of Chicago Press, vol. 89(3), pages 529-47, June. [Downloadable!] (restricted)
  6. repec:fth:prinin:315 is not listed on IDEAS
  7. Mincer, Jacob, 1976. "Unemployment Effects of Minimum Wages," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages S87-104, August. [Downloadable!] (restricted)
  8. David Neumark & William Wascher, 1994. "Minimum Wage Effects and Low-Wage Labor Markets: A Disequilibrium Approach," NBER Working Papers 4617, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  9. David Card & Lawrence Katz & Alan Krueger, 1993. "Comment on David Neumark and William Wascher, 'Employment Effects of Minimum and Subminimum Wages: Panel Data on State Minimum Wage Laws'," Working Papers 695, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. 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. [Downloadable!] (restricted)
  2. Mark Turner & Berna Demiralp, 2001. "Do higher minimum wages harm minority and inner-city teens?," The Review of Black Political Economy, Springer, vol. 28(4), pages 95-116, June. [Downloadable!] (restricted)
  3. Mark D. Partridge, Jamie S. Partridge, 1999. "Do Minimum Wage Hikes Raise US Long Term Unemployment? Evidence Using State Minimum Wage Rates," Regional Studies, Taylor and Francis Journals, vol. 33(8), pages 713-726, November. [Downloadable!] (restricted)
  4. Cardoso, Ana Rute, 2009. "Long-Term Impact of Youth Minimum Wages: Evidence from Two Decades of Individual Longitudinal Data," IZA Discussion Papers 4236, Institute for the Study of Labor (IZA). [Downloadable!]
  5. Sara Lemos, 2003. "Political Variables as Instruments for the Minimum Wage," Anais do XXXI Encontro Nacional de Economia [Proceedings of the 31th Brazilian Economics Meeting] f08, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics]. [Downloadable!]
    Other versions:
  6. CAPARRÓS RUIZ, Antonio & NAVARRO GÓMEZ, Mª Lucía, 2001. "¿Determina el salario mínimo seguir o no estudiando en España?," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 17, pages 107-124, Abril. [Downloadable!] (restricted)
  7. Christian Ragacs, 2003. "Mindestlöhne und Beschäftigung: Ein Überblick über die neuere empirische Literatur," Working Papers geewp25, Vienna University of Economics and B.A. Research Group: Growth and Employment in Europe: Sustainability and Competitiveness. [Downloadable!]
  8. Charlene Kalenkoski & Donald Lacombe, 2008. "Effects of Minimum Wages on Youth Employment: the Importance of Accounting for Spatial Correlation," Journal of Labor Research, Springer, vol. 29(4), pages 303-317, December. [Downloadable!] (restricted)
  9. Sara Lemos, 2004. "The Effects of the Minimum Wage on Prices in Brazil," Labor and Demography 0403011, EconWPA. [Downloadable!]
    Other versions:
  10. 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). [Downloadable!]
    Other versions:
  11. Hyslop, Dean & Stillman, Steven, 2004. "Youth Minimum Wage Reform and the Labour Market," IZA Discussion Papers 1091, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  12. Cardoso, Ana Rute & Portugal, Pedro, 2001. "Disentangling the Minimum Wage Puzzle: An Analysis of Job Accessions and Separations from a Longitudinal Matched Employer-Employee Data Set," CEPR Discussion Papers 2844, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  13. Luis Eduardo Arango & Paula Herrera & Carlos Esteban Posada, . "El salario mínimo: aspectos generales sobre los casos de Colombia y otros países," Borradores de Economia 436, Banco de la Republica de Colombia. [Downloadable!]
    Other versions:
  14. Sara Lemos, 2004. "A Menu Of Minimum Wage Variables For Evaluating Wages and Employment Effects: Evidence From Brazil," Labor and Demography 0403009, EconWPA. [Downloadable!]
    Other versions:
  15. Manfred Keil & Donald Robertson & James Symons, 2001. "Minimum Wages and Employment," CEP Discussion Papers dp0497, Centre for Economic Performance, LSE. [Downloadable!]
  16. Sara Lemos, 2007. "A Survey of the Effects of the Minimum Wage in Latin America," Discussion Papers in Economics 07/04, Department of Economics, University of Leicester. [Downloadable!]
  17. Rice, Patricia, . "Wages and the Education and Employment Choices of Young People: Empirical Analysis for Great Britain," Discussion Paper Series In Economics And Econometrics 0612, Economics Division, School of Social Sciences, University of Southampton. [Downloadable!]
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