Higher Minimum Wage and High School Dropout Rates

Stephanie O. Crofton, William L. Anderson and Emily C. Rawe

American Journal of Economics and Sociology, 2009, vol. 68, issue 2, pages 445-464

Abstract: We explore whether higher levels of the real minimum wage have differing effects on high school dropout rates across students of various races and ethnicities (whites, African Americans, Hispanics, and Asians). Using a panel of data across Maryland counties and annual observations in 1993-2004, we found higher real minimum wages to be associated with higher dropout rates for Hispanic students, but not for other races and ethnicities. We used a variety of model specifications and explanatory variables, including real income, the unemployment rate, teen pregnancy rates, and educational attainment among adults. Several of our findings are broadly consistent with commonly reported sociological observations regarding how behavioral choices may be affected by different levels across races and ethnicities of cultural integration of recent immigrants, family cohesiveness, the value placed on education, small business ownership, and hourly (vs. salaried) employment. Copyright © 2009 American Journal of Economics and Sociology, Inc..

Date: 2009

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