Minimum wages and teen employment: A spatial panel approach

Arbeitspapier

The authors employ spatial econometrics techniques and Annual Averages data from the U.S. Bureau of Labor Statistics for 1990-2004 to examine how changes in the minimum wage affect teen employment. Spatial econometrics techniques account for the fact that employment is correlated across states. Such correlation may exist if a change in the minimum wage in a state affects employment not only in its own state but also in other, neighboring states. The authors show that state minimum wages negatively affect teen employment to a larger degree than is found in studies that do not account for this correlation. Their results show a combined direct and indirect effect of minimum wages on teen employment to be -2.1% for a 10% increase in the real effective minimum wage. Ignoring spatial correlation underestimates the magnitude of the effect of minimum wages on teen employment.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 5933

Classification and Topics

• Classification: Wirtschaft ; Labor Economics Policies ; Labor Force and Employment, Size, and Structure ; Wages, Compensation, and Labor Costs: Public Policy ; Particular Labor Markets: Public Policy ; Multiple or Simultaneous Equation Models: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
• Subject: minimum wage ; teen employment ; spatial econometrics ; Mindestlohn ; Wirkungsanalyse ; Junge Arbeitskräfte ; Jugendarbeitslosigkeit ; Beschäftigungseffekt ; USA

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kalenkoski, Charlene M. ; Lacombe, Donald J.
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/55123
• URN: urn:nbn:de:101:1-201109286265
• Last update: 10.03.2025, 11:43 AM CET