Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/55123
Authors: 
Kalenkoski, Charlene M.
Lacombe, Donald J.
Year of Publication: 
2011
Series/Report no.: 
Discussion paper series // Forschungsinstitut zur Zukunft der Arbeit 5933
Abstract: 
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.
Subjects: 
minimum wage
teen employment
spatial econometrics
JEL: 
J08
J21
J38
J48
C31
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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