THE DIFFERENTIAL IMPACT OF FEDERAL AND STATE MINIMUM WAGES ON TEENAGE EMPLOYMENT

Stephen Bazen and Julie Le Gallo

Working Papers from HAL

Abstract: The "new economics of the minimum wage" is based on the findings from case studies that minimum wages had no effect on employment and may even have increased it. This conclusion is at odds with the findings of earlier studies and those of a number of more recent studies which find a statistically significant negative effect on teenage employment. These conflicting results constitute a puzzle. We find that this is due to minimum wage hikes implemented at the state-level having no negative effects on teenage employment during the 1980s and 1990s, while the federal hikes of the 1990s did. In states without their own minimum wages, the decline in the relative value of the federal minimum wage during the 1980s gave rise to an increase in low-wage employment that was subsequently checked and reversed by the federal hikes in the early 1990s.

Keywords: Federal Minimum Wages; State Minimum Wages; Teenage Employment (search for similar items in EconPapers)
Date: 2009-05-07
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00382509v1
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