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Minimum Wages and Teenagers' Enrollment-Employment Outcomes: A Multinomial Logit Model

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  • Ronald G. Ehrenberg
  • Alan J. Marcus

Abstract

This paper tests the hypothesis that the effect of minimum wage legislation on teenagers' education decisions is asymmetrical across family income classes, with the legislation inducing children from low-income families to reduce their levels of schooling and children from higher-income families to increase their educational attainment. We use data from the National Longitudinal Surveys (NLS) and exploit the fact that, although the minimum wage is fixed at a point in time, its value relative to adult wages varies across areas. Multinomial logit models of teenagers' enrollment-employment outcomes are estimated. The hypothesis appears to be confirmed for white teens; however, the evidence for nonwhites is more ambiguous.

Suggested Citation

  • Ronald G. Ehrenberg & Alan J. Marcus, 1982. "Minimum Wages and Teenagers' Enrollment-Employment Outcomes: A Multinomial Logit Model," Journal of Human Resources, University of Wisconsin Press, vol. 17(1), pages 39-58.
  • Handle: RePEc:uwp:jhriss:v:17:y:1982:i:1:p:39-58
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    References listed on IDEAS

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    1. Kiefer, Nicholas M, 1988. "Economic Duration Data and Hazard Functions," Journal of Economic Literature, American Economic Association, pages 646-679.
    2. Charles T. Clotfelter & Ronald G. Ehrenberg & Malcolm Getz & John J. Siegfried, 1991. "Economic Challenges in Higher Education," NBER Books, National Bureau of Economic Research, Inc, number clot91-1.
    3. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", pages 129-137.
    4. Clotfelter, Charles T. & Ehrenberg, Ronald G. & Getz, Malcolm & Siegfried, John J., 1992. "Economic Challenges in Higher Education," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226110509.
    5. David W. Breneman & Dean T. Jamison & Roy Radner, 1976. "The Ph.D. Production Process," NBER Chapters,in: Education as an Industry, pages 1-52 National Bureau of Economic Research, Inc.
    6. Charles T. Clotfelter & Ronald G. Ehrenberg & Malcolm Getz & John J. Siegfried, 1991. "Introduction to "Economic Challenges in Higher Education"," NBER Chapters,in: Economic Challenges in Higher Education, pages 1-16 National Bureau of Economic Research, Inc.
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    Cited by:

    1. Mark Turner & Berna Demiralp, 2001. "Do higher minimum wages harm minority and inner-city teens?," The Review of Black Political Economy, Springer;National Economic Association, pages 95-116.
    2. Neumark, David & Wascher, William, 2001. "Minimum Wages and Training Revisited," Journal of Labor Economics, University of Chicago Press, vol. 19(3), pages 563-595, July.
    3. Chaplin, Duncan D. & Turner, Mark D. & Pape, Andreas D., 2003. "Minimum wages and school enrollment of teenagers: a look at the 1990's," Economics of Education Review, Elsevier, vol. 22(1), pages 11-21, February.
    4. Luis Eduardo Arango & Paula Herrera & Carlos Esteban Posada, 2008. "El salario mínimo: aspectos generales sobre los casos de Colombia y otros países," ENSAYOS SOBRE POLÍTICA ECONÓMICA, BANCO DE LA REPÚBLICA - ESPE, vol. 26(56), pages 204-263, June.
    5. Mo, Pak Hung, 2011. "Minimum Wage Legislation and Economic Growth: Channels and Effects," MPRA Paper 35820, University Library of Munich, Germany.
    6. Kitao, Sagiri, 2015. "Pension reform and individual retirement accounts in Japan," Journal of the Japanese and International Economies, Elsevier, pages 111-126.
    7. 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.
    8. 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).
    9. Neumark, David & Wascher, William, 2003. "Minimum wages and skill acquisition: another look at schooling effects," Economics of Education Review, Elsevier, vol. 22(1), pages 1-10, February.
    10. Neumark, David & Wascher, William, 1995. "Minimum Wage Effects on Employment and School Enrollment," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 199-206, April.
    11. William J. Carrington & Bruce C. Fallick, 1999. "Minimum wage careers?," Finance and Economics Discussion Series 1999-46, Board of Governors of the Federal Reserve System (U.S.).
    12. 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.
    13. Don Bellante & Gabriel Picone, 1999. "Fast food and unnatural experiments: Another perspective on the New Jersey minimum wage," Journal of Labor Research, Springer, vol. 20(4), pages 463-477, December.
    14. Naercio Menezes-Filho & Reynaldo Fernandez & Paulo Picchetti & Ricardo Paes de Barros & Carlos Henrique Corseuil & Miguel Fogel & Daniel Santos & Simone Wajnman & Maria Carolina Leme, 2002. "Adolescents in Latin America and the Caribbean: Examining Time Allocation Decisions with Cross-Country Data," Research Department Publications 3163, Inter-American Development Bank, Research Department.
    15. Zsófia L. Bárány, 2016. "The Minimum Wage and Inequality: The Effects of Education and Technology," Journal of Labor Economics, University of Chicago Press, vol. 34(1), pages 237-274.
    16. Keith R. Ihlanfeldt & Davil L. Sjoquist, 1990. "The Effect of Residential Location on the Probability of Black and White Teenagers Having a Job," The Review of Regional Studies, Southern Regional Science Association, vol. 20(1), pages 10-20, Winter.
    17. Scott Adams & David Neumark, 2004. "When Do Living Wages Bite?," NBER Working Papers 10561, National Bureau of Economic Research, Inc.
    18. Michele Campolieti & Morley Gunderson & Byron Lee, 2012. "The (Non) Impact of Minimum Wages on Poverty: Regression and Simulation Evidence for Canada," Journal of Labor Research, Springer, vol. 33(3), pages 287-302, September.
    19. David Neumark & Olena Nizalova, 2007. "Minimum Wage Effects in the Longer Run," Journal of Human Resources, University of Wisconsin Press, vol. 42(2).
    20. Mark D. Turner & Berna Demiralp, 2000. "Effects of Higher Minimum Wages on Teen Employment and School Enrollment," JCPR Working Papers 198, Northwestern University/University of Chicago Joint Center for Poverty Research.
    21. Kellermann, Kim Leonie, 2017. "Minimum wages and vocational training incentives in Germany," CIW Discussion Papers 3/2017, University of Münster, Center for Interdisciplinary Economics (CIW).
    22. 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.
    23. Acemoglu, Daron & Shimer, Robert, 2000. "Productivity gains from unemployment insurance," European Economic Review, Elsevier, pages 1195-1224.
    24. Ozturk, orgul, 2006. "Minimum Wages, Market Inflexibilities, and Female Employment in Select OECD Countries," MPRA Paper 10222, University Library of Munich, Germany.
    25. Daron Acemoglu & Joshua Angrist, 1999. "How Large are the Social Returns to Education? Evidence from Compulsory Schooling Laws," Working papers 99-30, Massachusetts Institute of Technology (MIT), Department of Economics.

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