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Minimum Wages and Alcohol-Related Traffic Fatalities among Teens

Scott Adams (), McKinley Blackburn () and Chad Cotti ()

The Review of Economics and Statistics, 2012, vol. 94, issue 3, 828-840

Abstract: Using cross-state variation in minimum wages, we observe a positive relationship between the minimum wage and the number of alcohol-related accidents involving teen drivers. A similar effect is not observed when examining accidents among adults. The results are consistent with a positive income elasticity for alcoholic beverages and driving activities among young people, in particular for consumption out of discretionary income accorded by higher minimum wages. Evidence of a sizable impact of beer taxes on alcohol-related accidents among youths suggests that beer taxes are one avenue for policymakers to consider in counteracting this unintended consequence of minimum wages. © 2012 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Keywords: minimum wage; traffic fatalities; alcohol-related accidents; alcohol; teen drivers (search for similar items in EconPapers)
JEL-codes: J38 K42 (search for similar items in EconPapers)
Date: 2012
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