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Minimum wage effects on employment, substitution, and the teenage labor supply: Evidence from personnel data

Author

Listed:
  • Laura Giuliano

    (Department of Economics, University of Miami)

Abstract

Using personnel data from a large U.S. retail firm with more than 700 stores nationwide, this study examines the firm’s response to the 1996 federal minimum wage increase. First, increases in average wages had negative, but statistically insignificant effects on overall employment. Second, however, increases in the relative wages of teenagers led to significant increases in the relative employment of teenagers, and especially of more productive teenagers from affluent ZIP codes. This second result is consistent with models that link labor demand to labor market participation, and in particular suggests informational asymmetries may be important in the teenage labor market.

Suggested Citation

  • Laura Giuliano, 2009. "Minimum wage effects on employment, substitution, and the teenage labor supply: Evidence from personnel data," Working Papers 2010-5, University of Miami, Department of Economics.
    • Handle: RePEc:mia:wpaper:2010-5
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    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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