Employment Effects of Minimum and Subminimum Wages: Panel Data on State Minimum Wage Laws
Using panel data on state minimum wage laws and economic conditions for the years 1973â€“89, the authors reevaluate existing evidence on the effects of a minimum wage on employment. Their estimates indicate that a 10% increase in the minimum wage causes a decline of 1â€“2% in employment among teenagers and a decline of 1.5â€“2% in employment for young adults, similar to the ranges suggested by earlier time-series studies. The authors also find evidence that youth subminimum wage provisions enacted by state legislatures moderate the disemployment effects of minimum wages on teenagers.
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