Effects of Local, State, and Federal Minimum Wage on Employment Growth among Teenagers in the Restaurant Industry

Shaun Gilyard and Marta Podemska-Mikluch ()
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Shaun Gilyard: West Virginia University
Marta Podemska-Mikluch: Gustavus Adolphus College

International Advances in Economic Research, 2020, vol. 26, issue 1, No 7, 89-101

Abstract: Abstract Over the last 20 years, local municipalities have been implementing minimum wage ordinances at an accelerated rate. These local changes, along with state and federal minimum wage increases, are included in the examination of the impact of minimum wage hikes on employment growth of teenagers in the food services and drinking places subsector. While most minimum wage research focuses on employment levels, recent contributions highlight the importance of analyzing employment growth. Following this trend, this study focuses on teenagers within the restaurant industry to test for the impact of minimum wages on inexperienced workers. Using a distributed-lag model, the results show that an increase in a minimum wage reduces employment growth for teenagers within this subsector. The effects of minimum wages within this demographic were most strongly felt in the first three years following an increase in minimum wage. Specifically, the results show that a 10% increase in the minimum wage decreases the employment growth rate by approximately 2.27% over a period of three years.

Keywords: Minimum wage; Employment growth; City ordinances; Earnings (search for similar items in EconPapers)
JEL-codes: H73 J31 J38 J63 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s11294-020-09770-8

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