Minimum Wages and Employment
This paper investigates the effect of minimum wages on employment using a panel of US state-based data. We estimate a minimalist dynamic version of the specification implied by neo-classical theory. We find statistically and economically significant effects of minimum wages on youth employment. Unlike many other studies we find also significant effects on aggregate state employment. These results re-establish the conventional wisdom as existing before the work of Card-Krueger-Katz. The paper meets the methodological criticisms of this sort of panel study made by CKK. An important econometric innovation in this paper is to produce estimates allowing for cross-sectional correlation, which offers unbiased inference and potential efficiency gains.
|Date of creation:||Jun 2001|
|Contact details of provider:|| Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP|
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CEP Discussion Papers
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- Donald Robertson & James Symons, 2000.
"Factor Residuals in SUR Regressions: Estimating Panels Allowing for Cross Sectional Correlation,"
CEP Discussion Papers
dp0473, Centre for Economic Performance, LSE.
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LSE Research Online Documents on Economics
20131, London School of Economics and Political Science, LSE Library.
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"Minimum Wage Effects on Employment and School Enrollment,"
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American Statistical Association, vol. 13(2), pages 199-206, April.
- David Neumark & William Wascher, 1994. "Minimum Wage Effects on Employment and School Enrollment," NBER Working Papers 4679, National Bureau of Economic Research, Inc.
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