Does Higher Minimum Wage Discourage College Enrollment? A Cross-State Empirical Study of the United States

Arindam Mandal, Sumant Rai and Elias K. Shukralla
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Arindam Mandal: Siena University, New York, U.S.A.
Sumant Rai: Independent Scholar, Georgia, U.S.A.
Elias K. Shukralla: Siena University, New York, U.S.A.

American Business Review, 2025, vol. 28, issue 2, 618-634

Abstract: The paper investigates the impact of minimum wage increase on college enrollment in the U.S. using a panel of 50 U.S. states during the period 2009-2018. By examining the impact of minimum wage on college enrollment, particularly within different types of post-secondary institutions, our study adds to the existing literature. This is a departure from previous research, which predominantly concentrated on two-year college enrollment. We find evidence that raising minimum wages adversely affects overall college enrollment. However, the results vary depending on the type of colleges. The increase in minimum wage has a negative impact on the enrollment of two-year colleges, while positively affecting the enrollment in four-year public colleges. We use state level aggregated data and estimate our results using a System Generalized Method of Moments (System GMM) to account for endogeneity concerns surrounding the minimum wage and college enrollment.

Keywords: Minimum Wage; College Enrollment; Macroeconomics; Human Capital; Dynamic Panel; Labor Market (search for similar items in EconPapers)
JEL-codes: E24 J18 J24 J31 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ris:ambsrv:021863

DOI: 10.37625/abr.28.2.618-634

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