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Long-Term Impact of Youth Minimum Wages: Evidence from Two Decades of Individual Longitudinal Data

Author

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  • Cardoso, Ana Rute

    () (IAE Barcelona (CSIC))

Abstract

This paper quantifies the long-run impact of exposure to youth minimum wages and sheds light on its mechanisms. It uses remarkable longitudinal data spanning for twenty years and explores legislative changes that define groups of teenagers exposed for different durations. After controlling for the contemporaneous impact of the minimum wage, its long-run impact translates into: an overall wage premium, consistent with an upgrading in the quality of jobs offered; a flatter tenure-earnings profile, consistent with lower initial investment in firm-specific training. Interestingly, the overall wage premium increases with exposure and the tenure-earnings profile is flatter the longer the exposure.

Suggested Citation

  • 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).
  • Handle: RePEc:iza:izadps:dp4236
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    References listed on IDEAS

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    More about this item

    Keywords

    skill formation; human capital investment; on-the-job-training; career; long-term; linked employer-employee data;

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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