Labor Market Connections, Minimum Wages, and Youth Employment
We construct a labor search model where individuals can be either connected or unconnected. Connected workers get a higher rate of job oﬀers when unemployed and are separated from their jobs at a lower rate than unconnected workers. Unconnected workers can become connected through employment. This model can account for age patterns in employment data. By introducing minimum wages, the model explains empirical ﬁndings on the eﬀects of minimum wage laws. Finally, the model shows that minimum wages account for a large part of the diﬀerences in youth employment between Europe and the United States.
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in: Youth Employment and Joblessness in Advanced Countries, pages 427-472
National Bureau of Economic Research, Inc.
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- Walter J. Wessels, 2005. "Does the Minimum Wage Drive Teenagers Out of the Labor Force?," Journal of Labor Research, Transaction Publishers, vol. 26(1), pages 169-176, January.
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