Working Paper: NBER ID: w4679
Authors: David Neumark; William Wascher
Abstract: We argue in this paper that the focus on employment effects in recent studies of minimum wages ignores an important interaction between schooling, employment, and the minimum wage. To study these linkages, we estimate a conditional logit model of employment and enrollment outcomes for teenagers using state-year observations for the period 1977 to 1989. The results show a negative influence of minimum wages on school enrollment and a positive effect on the proportion of teens neither employed nor in school. We further suggest that our results are consistent with substitution by employers of higher- for lower-skilled teenagers, with the displaced teens ending up both out of work and out of school.
Keywords: Minimum Wage; Employment; School Enrollment; Teenagers
JEL Codes: J38; I21
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| minimum wage (J38) | school enrollment rates (I21) |
| minimum wage (J38) | employment status (J63) |
| school enrollment rates (I21) | employment status (J63) |
| minimum wage (J38) | proportion of teenagers neither employed nor enrolled (I21) |
| minimum wage (J38) | disemployment effects (J65) |