Labor Market Connections, Minimum Wages, and Youth Employment
AbstractWe construct a labor search model where individuals can be either connected or unconnected. Connected workers get a higher rate of job oﬀers when unemployed and are separated from their jobs at a lower rate than unconnected workers. Unconnected workers can become connected through employment. This model can account for age patterns in employment data. By introducing minimum wages, the model explains empirical ﬁndings on the eﬀects of minimum wage laws. Finally, the model shows that minimum wages account for a large part of the diﬀerences in youth employment between Europe and the United States.
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Bibliographic InfoPaper provided by Society for Economic Dynamics in its series 2008 Meeting Papers with number 794.
Date of creation: 2008
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Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
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