Stationary data and the effect of the minimum wage on teenage employment

Jaehwan Park () and Ronald Ratti

Applied Economics, 1998, vol. 30, issue 4, 435-440

Abstract: One of the interesting features of time series work on the effect of the minimum wage is that the problem of possible spurious regressions when data may be non-stationary has been largely ignored. It is shown that this is potentially a serious problem. It is found that although the teenage employment to population ratio is stationary, the 'independent' variables in time series regression equations are non-stationary. Substitution of the stationary first differences of the independent variables in the regression equations for their levels, is found to greatly undermine the estimated influence of the minimum wage on the employment-to-population ratio. Estimates of the effect of the minimum wage are found to be only marginally more significant when seasonal differencing of the dependent variable and an ARCH estimation technique are employed.

Date: 1998
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/000368498325705 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:applec:v:30:y:1998:i:4:p:435-440

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/000368498325705

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().