Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/192940
Authors: 
Bazen, Stephen
Marimoutou, Velayoudom
Year of Publication: 
2018
Citation: 
[Journal:] International Journal for Re-Views in Empirical Economics (IREE) [ISSN:] 2566-8269 [Volume:] 2 [Year:] 2018 [Issue:] 2018-5 [Pages:] 1-13
Abstract: 
In 2002 we published a paper in which we used state space time series methods to analyse the teenage employment-federal minimum wage relationship in the US (Bazen and Marimoutou, 2002). The study used quarterly data for the 46 year period running from 1954 to 1999. We detected a small, negative but statistically significant effect of the federal minimum wage on teenage employment, at a time when some studies were casting doubt on the existence of such an effect. In this note we re-estimate the original model with a further 16 years of data (up to 2015). We find that the model satisfactorily tracks the path of the teenage employment-population ratio over this 60 year period, and yields a consistently negative and statistically significant effect of minimum wages on teenage employment. The conclusion reached is the same as in the original paper, and the elasticity estimates very similar: federal minimum wage hikes lead to a reduction in teenage employment with a short run elasticity of around -0.13. The estimated long run elasticity of between -0.37 and -0.47 is less stable, but is nevertheless negative and statistically significant.
Subjects: 
minimum wage
teenage employment
state space methods
unobserved components model
replication study
JEL: 
J21
J38
C22
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by/4.0/
Document Type: 
Article

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