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Effects of Minimum Wage Increases on Teenage Employment: Survey Versus Administrative Data

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  • De Wet van der Westhuizen

    (School of Economics, Auckland University of Technology)

Abstract

This paper empirically examines the impact of the 2001 New Zealand minimum wage reform on the employment of 16-17 and 18-19-year-olds using administrative data from Statistics New Zealand’s Integrated Data Infrastructure. This reform increased the real minimum wage of 18-19-year-olds by 68%, and 16-17-year-olds by 35% in 2001 and 2002. The impact of the minimum wage reform on employment is estimated in two phases. First, existing New Zealand empirical evidence is reproduced using survey data from the Household Labour Force Survey to test and adopt an identification method which has examined the impact of this reform and is established in the international literature. Second, using this identification method in combination with administrative data, preliminary estimates highlight that the 2001 minimum wage reform had small and positive effects on the employment of teenagers. However, findings must be interpreted with caution due to concerns with a key identification assumption.

Suggested Citation

  • De Wet van der Westhuizen, 2022. "Effects of Minimum Wage Increases on Teenage Employment: Survey Versus Administrative Data," Working Papers 2022-03, Auckland University of Technology, Department of Economics.
    • Handle: RePEc:aut:wpaper:202203
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    References listed on IDEAS

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    1. Evan Totty, 2017. "The Effect Of Minimum Wages On Employment: A Factor Model Approach," Economic Inquiry, Western Economic Association International, vol. 55(4), pages 1712-1737, October.
    2. 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, vol. 28(4), pages 95-116, June.
    3. Clemens, Jeffrey & Wither, Michael, 2019. "The minimum wage and the Great Recession: Evidence of effects on the employment and income trajectories of low-skilled workers," Journal of Public Economics, Elsevier, vol. 170(C), pages 53-67.
    4. John M. Peterson, 1957. "Employment Effects of Minimum Wages, 1938-50," Journal of Political Economy, University of Chicago Press, vol. 65(5), pages 412-412.
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