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High School Enrollment, Minimum Wages and Education Spending

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Listed author(s):
  • Stuart Landon

Abstract

The impact on high school enrollment of minimum wages and different types of education spending is examined empirically using Canadian provincial-level data. Increases in the minimum wage are shown to have a significant negative effect on the enrollment rates of 16- and 17-year-old males and 17-year-old females. The empirical estimates imply that a 50 cent increase in the hourly minimum wage causes a 0.7 percentage point fall in the percent of 16- and 17-year-olds enrolled in school (a decline that, in Ontario, would amount to more than 1,700 students). The results also indicate that lower student-teacher ratios, better paid teachers, more administrative spending, increased spending on instructional supplies, and increases in other school board operating expenditures do not have a systematic effect on enrollment rates.

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Article provided by University of Toronto Press in its journal Canadian Public Policy.

Volume (Year): 23 (1997)
Issue (Month): 2 (June)
Pages: 141-163

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Handle: RePEc:cpp:issued:v:23:y:1997:i:2:p:141-163
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  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.
  2. Richard Dickens & Stephen Machin & Alan Manning, 1994. "The Effects of Minimum Wages on Employment: Theory and Evidence from the US," NBER Working Papers 4742, National Bureau of Economic Research, Inc.
  3. Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-793, September.
  4. MacKinnon, James G. & White, Halbert & Davidson, Russell, 1983. "Tests for model specification in the presence of alternative hypotheses : Some further results," Journal of Econometrics, Elsevier, vol. 21(1), pages 53-70, January.
  5. 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..
  6. Davidson, Russell & MacKinnon, James G, 1981. "Several Tests for Model Specification in the Presence of Alternative Hypotheses," Econometrica, Econometric Society, vol. 49(3), pages 781-793, May.
  7. David Neumark & William Wascher, 1992. "Employment Effects of Minimum and Subminimum Wages: Panel Data on State Minimum Wage Laws," ILR Review, Cornell University, ILR School, vol. 46(1), pages 55-81, October.
  8. Randall J. Olsen & George Farkas, 1989. "Endogenous Covariates in Duration Models and the Effect of Adolescent Childbirth on Schooling," Journal of Human Resources, University of Wisconsin Press, vol. 24(1), pages 39-53.
  9. Sander, William & Krautmann, Anthony C., 1991. "Local taxes, schooling, and jobs in Illinois," Economics of Education Review, Elsevier, vol. 10(2), pages 111-121, June.
  10. Stephen Donald & David Green & Harry Paarsch, "undated". "Differences in Earnings and Wage Distributions between Canada and the United States: An Application of a Semi-Parametric Estimator of Distribution Functions with Covariates," Working Papers _003, University of California at Berkeley, Econometrics Laboratory Software Archive.
  11. Joshua D. Angrist & Alan B. Keueger, 1991. "Does Compulsory School Attendance Affect Schooling and Earnings?," The Quarterly Journal of Economics, Oxford University Press, vol. 106(4), pages 979-1014.
  12. David Card, 1992. "Using Regional Variation in Wages to Measure the Effects of the Federal Minimum Wage," ILR Review, Cornell University, ILR School, vol. 46(1), pages 22-37, October.
  13. Sander, William & Schaeffer, Peter V., 1991. "Schooling and urban employment growth," Journal of Economics and Business, Elsevier, vol. 43(1), pages 69-77, February.
  14. repec:fth:prinin:300 is not listed on IDEAS
  15. Neumark, David & Wascher, William, 1995. "Minimum-Wage Effects on School and Work Transitions of Teenagers," American Economic Review, American Economic Association, vol. 85(2), pages 244-249, May.
  16. Evans, William N & Oates, Wallace E & Schwab, Robert M, 1992. "Measuring Peer Group Effects: A Study of Teenage Behavior," Journal of Political Economy, University of Chicago Press, vol. 100(5), pages 966-991, October.
  17. William N. Evans & Robert M. Schwab, 1995. "Finishing High School and Starting College: Do Catholic Schools Make a Difference?," The Quarterly Journal of Economics, Oxford University Press, vol. 110(4), pages 941-974.
  18. David Card & Lawrence Katz & Alan B. 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..
  19. David Neumark & William Wascher, 1993. "Employment Effects of Minimum and Subminimum Wages: Reply to Card, Katz and Krueger," NBER Working Papers 4570, National Bureau of Economic Research, Inc.
  20. Baker, Michael & Benjamin, Dwayne & Stanger, Shuchita, 1999. "The Highs and Lows of the Minimum Wage Effect: A Time-Series Cross-Section Study of the Canadian Law," Journal of Labor Economics, University of Chicago Press, vol. 17(2), pages 318-350, April.
  21. Hanushek, Eric A, 1986. "The Economics of Schooling: Production and Efficiency in Public Schools," Journal of Economic Literature, American Economic Association, vol. 24(3), pages 1141-1177, September.
  22. Agell, Jonas & Lommerud, Kjell Erik, 1997. "Minimum wages and the incentives for skill formation," Journal of Public Economics, Elsevier, vol. 64(1), pages 25-40, April.
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Cited by:

  1. Rice, Patricia, 2006. "Wages and the education and employment choices of young people: empirical analysis for Great Britain," Discussion Paper Series In Economics And Econometrics 612, Economics Division, School of Social Sciences, University of Southampton.
  2. Konstantinos Eleftheriou & George Athanasiou & Panagiotis Petrakis, 2010. "Wages and Higher Education Participation," Journal of Research in Educational Sciences, ASERS Publishing, vol. 0(1), pages 22-31, June.
  3. Matthew Webb & Arthur Sweetman & Casey Warman, 2014. "How Targeted is Targeted Tax Relief? Evidence from the Unemployment Insurance Youth Hires Program," Working Papers 1298, Queen's University, Department of Economics.
  4. Matthew D. Webb & Arthur Sweetman & Casey Warman, 2016. "Targeting Tax Relief at Youth Employment," Canadian Public Policy, University of Toronto Press, vol. 42(4), pages 415-430, December.
  5. Elizabeth Webster & Mark Wooden & Gary Marks, 2004. "Reforming the Labour Market for Australian Teachers," Melbourne Institute Working Paper Series wp2004n28, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  6. Patricia Rice, 2010. "Minimum wages and schooling: evidence from the UK's introduction of a national minimum wage," LSE Research Online Documents on Economics 33515, London School of Economics and Political Science, LSE Library.
  7. Pacheco, Gail A. & Cruickshank, Amy A., 2007. "Minimum wage effects on educational enrollments in New Zealand," Economics of Education Review, Elsevier, vol. 26(5), pages 574-587, October.

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