Minimum Wages and Teen Employment: A Spatial Panel Approach
AbstractThe authors employ spatial econometric techniques and Annual Averages data from the U.S. Bureau of Labor Statistics for 1990-2004 to examine how changes in the minimum wage affect teen employment. Spatial econometric techniques account for the fact that employment is correlated across states. Such correlation may exist if a change in the minimum wage in a state affects employment not only in its own state but also in other, neighboring states. The authors show that state minimum wages negatively affect teen employment to a larger degree than is found in studies that do not account for this correlation. Their results show a combined direct and indirect effect of minimum wages on teen employment to be -2.1% for a 10% increase in the real effective minimum wage. Ignoring spatial correlation underestimates the magnitude of the effect of minimum wages on teen employment.
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Bibliographic InfoPaper provided by Regional Research Institute, West Virginia University in its series Working Papers with number 201108.
Length: 19 pages
Date of creation: Aug 2011
Date of revision:
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More information through EDIRC
spatial econometrics; minimum wage; correlation;
Other versions of this item:
- Charlene M. Kalenkoski & Donald J. Lacombe, 2013. "Minimum wages and teen employment: A spatial panel approach," Papers in Regional Science, Wiley Blackwell, vol. 92(2), pages 407-417, 06.
- Kalenkoski, Charlene M. & Lacombe, Donald J., 2011. "Minimum Wages and Teen Employment: A Spatial Panel Approach," IZA Discussion Papers 5933, Institute for the Study of Labor (IZA).
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
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