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Evidence on Employment Effects of Minimum Wages and Subminimum Wage Provisions From Panel Data on State Minimum Wage Laws


  • David Neumark
  • William Wascher


We construct a panel data set on state-level minimum wage laws and economic conditions to reevaluate existing evidence on minimum wage effects on employment, most of which comes from time-series data. Our estimates of the elasticities of teen and young-adult employment-to-population ratios fall primarily in the range -0.1 to -0.2, similar to the consensus range of estimates from time-series studies. We also find evidence that youth subminimum wage provisions enacted by state legislatures have moderated the disemployment effects of minimum wages.

Suggested Citation

  • David Neumark & William Wascher, 1991. "Evidence on Employment Effects of Minimum Wages and Subminimum Wage Provisions From Panel Data on State Minimum Wage Laws," NBER Working Papers 3859, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:3859
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    References listed on IDEAS

    1. Nadiri, M Ishaq & Rosen, Sherwin, 1969. "Interrelated Factor Demand Functions," American Economic Review, American Economic Association, vol. 59(4), pages 457-471, Part I Se.
    2. Edward M. Gramlich, 1976. "Impact of Minimum Wages on Other Wages, Employment, and Family Incomes," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 7(2), pages 409-462.
    3. repec:fth:prinin:280 is not listed on IDEAS
    4. Brown, Charles, 1988. "Minimum Wage Laws: Are They Overrated?," Journal of Economic Perspectives, American Economic Association, vol. 2(3), pages 133-145, Summer.
    5. Richard B. Freeman & Wayne B. Gray & Casey Ichniowski, 1981. "Low-Cost Student Labor: The Use and Effects of the Subminimum Wage Provisions for Full-time Students," NBER Working Papers 0765, National Bureau of Economic Research, Inc.
    6. Betsey, Charles L & Dunson, Bruce H, 1981. "Federal Minimum Wage Laws and the Employment of Minority Youth," American Economic Review, American Economic Association, vol. 71(2), pages 379-384, May.
    7. Charles Brown & Curtis Gilroy & Andrew Kohen, 1983. "Time-Series Evidence of the Effect of the Minimum Wage on Youth Employment and Unemployment," Journal of Human Resources, University of Wisconsin Press, vol. 18(1), pages 3-31.
    8. Adie, Douglas K, 1973. "Teen-Age Unemployment and Real Federal Minimum Wages," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages 435-441, Part I, M.
    9. Richard B. Freeman, 1982. "Economic Determinants of Geographic and Individual Variation in the Labor Market Position of Young Persons," NBER Chapters,in: The Youth Labor Market Problem: Its Nature, Causes, and Consequences, pages 115-154 National Bureau of Economic Research, Inc.
    10. Katz, L.F. & Krueger, A.B, 1991. "The Effect Of The New Minimum Wage Law In A Low-Wage Labor Market," Harvard Institute of Economic Research Working Papers 1544, Harvard - Institute of Economic Research.
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    Cited by:

    1. Gonzalo Castex H., 2012. "Aumento del Salario Mínimo y sus Efectos sobre el Mercado Laboral," Notas de Investigación Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 15(2), pages 117-129, August.
    2. Armin Falk & Ernst Fehr & Christian Zehnder, "undated". "The Behavioral Effects of Minimum Wages," IEW - Working Papers 247, Institute for Empirical Research in Economics - University of Zurich.

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