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The Effect of Minimum Wages on Youth Employment in Canada: A Panel Study

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  • Terence Yuen

Abstract

Previous U.S. panel estimates of minimum wage effects have been criticized on the grounds that their identification rests on comparisons of ‘‘low-wage’’ and ‘‘high-wage’’ workers. Using Canadian panel data for 1988–90, I compare estimates based on the traditional U.S. methodology with those based on samples of ‘‘low-wage’’ workers exclusively. The results would appear to vindicate the critics: The minimum wage effect from the latter approach is virtually zero. Yet, estimates from different subgroups of low-wage workers indicate that there is a significant disemployment effect for those with longer low-wage employment histories. This highlights the heterogeneity within low-wage workers and the importance of carefully defining the target group not solely based on workers’ wages.

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  • Terence Yuen, 2003. "The Effect of Minimum Wages on Youth Employment in Canada: A Panel Study," Journal of Human Resources, University of Wisconsin Press, vol. 38(3).
    • Handle: RePEc:uwp:jhriss:v:38:y:2003:i:3:p647-672
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    Cited by:

    1. David Neumark & William Wascher, 2006. "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research," NBER Working Papers 12663, National Bureau of Economic Research, Inc.
    2. Jeffrey P. Thompson, 2009. "Using Local Labor Market Data to Re-Examine the Employment Effects of the Minimum Wage," ILR Review, Cornell University, ILR School, vol. 62(3), pages 343-366, April.
    3. Michele Campolieti & Morley Gunderson & Byron Lee, 2014. "Minimum Wage Effects On Permanent Versus Temporary Minimum Wage Employment," Contemporary Economic Policy, Western Economic Association International, vol. 32(3), pages 578-591, July.
    4. Tony Fang & Morley Gunderson, 2009. "Minimum Wage Impacts on Older Workers: Longitudinal Estimates from Canada," British Journal of Industrial Relations, London School of Economics, vol. 47(2), pages 371-387, June.
    5. Brewer, Mike & Crossley, Thomas F. & Zilio, Federico, 2019. "What Do We Really Know about the Employment Effects of the UK's National Minimum Wage?," IZA Discussion Papers 12369, Institute of Labor Economics (IZA).
    6. Kolev, Alexandre & Saget, Catherine, 2005. "Towards a better understanding of the nature, causes and consequences of youth labor market disadvantage: evidence for South-East Europe," Social Protection Discussion Papers and Notes 32544, The World Bank.
    7. Maite Blázquez Cuesta & Raquel Llorente Heras & Julián Moral Carcedo, 2011. "Minimum Wage And Youth Employment Rates, 2000-2008," Revista de Economia Aplicada, Universidad de Zaragoza, Departamento de Estructura Economica y Economia Publica, vol. 19(2), pages 35-57, Autumn.
    8. Anna Baranowska-Rataj & Iga Magda, 2015. "The impact of the minimum wage on job separations and working hours among young people in Poland," Working Papers 75, Institute of Statistics and Demography, Warsaw School of Economics.
    9. Michele Campolieti & Tony Fang & Morley Gunderson, 2005. "Minimum wage impacts on youth employment transitions, 1993–1999," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 38(1), pages 81-104, February.
    10. Nicolás Abbate & Bruno Jiménez, 2023. "Do Minimum Wage Hikes Lead to Employment Destruction? Evidence from a Regression Discontinuity Design in Argentina," CEDLAS, Working Papers 0310, CEDLAS, Universidad Nacional de La Plata.
    11. Sen, Anindya & Rybczynski, Kathleen & Van De Waal, Corey, 2011. "Teen employment, poverty, and the minimum wage: Evidence from Canada," Labour Economics, Elsevier, vol. 18(1), pages 36-47, January.
    12. Joseph J. Sabia & Richard V. Burkhauser & Benjamin Hansen, 2012. "Are the Effects of Minimum Wage Increases Always Small? New Evidence from a Case Study of New York State," ILR Review, Cornell University, ILR School, vol. 65(2), pages 350-376, April.
    13. Ernest Boffy-Ramirez, 2022. "Push or Pull? Measuring the labor supply response to the minimum wage using an individual-level panel," Applied Economics, Taylor & Francis Journals, vol. 54(35), pages 4043-4059, July.
    14. Ahmad Jafari Samimi, 2011. "Minimum Wage and Youth Employment The Case Study of Iran's Manufacturing Industries," Journal of Education and Vocational Research, AMH International, vol. 1(2), pages 38-43.
    15. Tony Fang & Morley Gunderson & Carl Lin, 2021. "The impact of minimum wages on wages, wage spillovers, and employment in China: Evidence from longitudinal individual‐level data," Review of Development Economics, Wiley Blackwell, vol. 25(2), pages 854-877, May.
    16. Daiji Kawaguchi & Ken Yamada, 2007. "The Impact Of The Minimum Wage On Female Employment In Japan," Contemporary Economic Policy, Western Economic Association International, vol. 25(1), pages 107-118, January.
    17. Leila Sabokkhiz & Fatma Guven Lisaniler & Ikechukwu D. Nwaka, 2021. "Minimum Wage and Household Consumption in Canada: Evidence from High and Low Wage Provinces," Sustainability, MDPI, vol. 13(12), pages 1-20, June.
    18. Michael Shannon, 2011. "The Employment Effects of Lower Minimum Wage Rates for Young Workers: Canadian Evidence," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 50(4), pages 629-655, October.
    19. Joseph Marchand, 2017. "Thinking about Minimum Wage Increases in Alberta: Theoretically, Empirically, and Regionally," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 491, pages 1-20, September.
    20. Larry D. Singell & James R. Terborg, 2007. "Employment Effects Of Two Northwest Minimum Wage Initiatives," Economic Inquiry, Western Economic Association International, vol. 45(1), pages 40-55, January.
    21. Josip Lesica, 2018. "Lobbying For Minimum Wages," Economic Inquiry, Western Economic Association International, vol. 56(4), pages 2027-2057, October.
    22. Boffy-Ramirez, Ernest, 2019. "The Short-Run Effects of the Minimum Wage on Employment and Labor Market Participation: Evidence from an Individual-Level Panel," IZA Discussion Papers 12137, Institute of Labor Economics (IZA).

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