The effects of minimum wages on youth employment, unemployment, and income

Charlene Kalenkoski

IZA World of Labor, 2024, No 243.v2, 243.v2

Abstract: Policymakers often propose a minimum wage as a means of raising incomes and lifting workers out of poverty. However, improvements in some young workers’ incomes due to a minimum wage come at a cost to others. Minimum wages reduce employment opportunities for youths and create unemployment. Workers miss out on on-the-job training opportunities that would have been paid for by reduced wages upfront but would have resulted in higher wages later. Youths who cannot find jobs must be supported by their families or by the social welfare system. Delayed entry into the labor market reduces the lifetime income stream of young unskilled workers.

Keywords: minimum wages; youth employment; entry-level jobs; work experience; on-the-job training (search for similar items in EconPapers)
JEL-codes: J30 J31 (search for similar items in EconPapers)
Date: 2024
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