An Evaluation of Recent Evidence on the Employment Effects of Minimum and Subminimum Wages
32 Pages Posted: 28 Dec 2006 Last revised: 17 Nov 2022
Date Written: November 1993
Abstract
We re-examine recent cross-state evidence on the employment effect of the minimum wage. A re-evaluation of the data used in Neumark and Wascher's (1992) study of the minimum wage provides no support for their conclusion that the minimum wage has an adverse effect on teenage employment. Neumark and Wascher's findings are shown to be due to an inadvertent mistake in the definition of their school enrollment variable. In addition, Neumark and Wascher's coverage-weighted relative minimum wage index is shown to be negatively correlated with average teenage wages. We also re-analyze the experiences of individual states following the April 1990 increase in the Federal minimum wage, allowing for a full year lag in the effect of the law and controlling for changes in (properly measured) enrollment rates. These changes actually strengthen Card's (1992a) conclusion that the 1990 increase in the Federal minimum had no adverse employment effect. Lastly, we find that subminimum wages are rarely used, casting doubt on the claim that subminimum wage provisions temper any employment losses attributable to the minimum wage.
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
The Effect of the Minimum Wage on Employment and Unemployment: A Survey
By Charles Brown, Curtis Gilroy, ...
-
Using Regional Variation in Wages to Measure the Effects of the Federal Minimum Wage
By David Card
-
The Effect of the Minimum Wage on the Fast Food Industry
By Lawrence F. Katz and Alan B. Krueger
-
Do Minimum Wages Reduce Employment? A Case Study of California, 1987-89
By David Card
-
By David Neumark and William Wascher
-
Ownership, Agency and Wages: an Examination in the Fast Food Industry
-
"The Minimum Wage and the Employment of Youth: Evidence from the Nlsy"
By Janet Currie and Bruce Fallick
-
Is the Time-Series Evidence on Minimum Wage Effects Contaminated by Publication Bias?
By David Neumark and William Wascher
-
The Effect of the New Minimum Wage Law in a Low-Wage Labor Market
By Lawrence F. Katz and Alan B. Krueger