Time-Series Evidence of the Effect of the Minimum Wage on Youth Employment and Unemployment

Abstract

Curtis Gilroy is a Senior Economist with the Minimum Wage Study Commission. The opinions expressed in this paper are those of the authors and do not necessarily reflect the official position of the institutions with which they are affiliated. We benefited from comments of Jacob Mincer and Finis Welch on an earlier version of the paper, and from the assistance of John Stinson in obtaining the data. Ann Levin and Nancy Zeitler provided helpful research assistance. The research reported here is part of the NBER'S research program in Labor Studies.

Do Minimum Wages Reduce Employment? A Case Study of California, 1987–89

“…Hours per week of employed teenagers also increased slightly in California relative to the comparison group, leading to an 11% relative increase in usual weekly earnings. As shown in Tables 2 and 3, these There is no evidence, however, of the 3% to 8% decline in employment predicted by the estimates in Brown, Gilroy, and Kohen (1982) or Neumark and Wascher (1992).…”

“…It is widely believed that the imposition of a binding wage floor will reduce the employment of younger and less-skilled workers. Although the theoretical arguments underlying this consensus are simple and compelling, the empirical evidence is surprisingly limited (see Brown, Gilroy, and Kohen 1982 for a comprehensive survey). A major obstacle confronting most recent studies of minimum wage legislation is the near-universality of the federal minimum rate.…”

Observations and Conjectures on the U.S. Employment Miracle

“…Moreover, this pattern seems to be appearing worldwide (see Blanchflower and Freeman, 1997 Dunlop (1938). For a thorough survey, see Abraham and Haltiwanger (1995 Hamermesh's (1993) Card andKrueger, 1995, andBrown, Gilroy andKohen, 1982 .62 (.98) .47…”

Minimum wage effects by gender

“…Male Brown et al (1982) show that both demand and supply controls should be included when estimating the effect of the minimum wage. On the demand side, we include the adult male unemployment rate (UPR).…”