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Employment effects of minimum and subminimum wages: reply to Card, Katz, and Krueger

  • David Neumark
  • William Wascher

In Neumark and Wascher (1992), we present findings supporting the earlier consensus that minimum wages reduce employment for teens and young adults, with elasticities in the range -0.1 to -0.2. In addition, we find that subminimum wages moderate these disemployment effects. Card, Katz and Krueger (1993) criticize numerous aspects of our analysis, and contest our conclusions. This reply presents an assessment of their arguments, as well as additional evidence related to some of the criticisms that they raise. We conclude that the issues raised by Card, et al., upon further examination, do not alter the conclusions from our original paper, and in some cases even reinforce those conclusions.

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Paper provided by Board of Governors of the Federal Reserve System (U.S.) in its series Working Paper Series / Economic Activity Section with number 144.

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Date of creation: 1993
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Handle: RePEc:fip:fedgwe:144
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