Minimum Wages and Teen Employment: A Spatial Panel Approach

Charlene Kalenkoski and Donald Lacombe ()
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Donald Lacombe: Regional Research Institute, West Virginia University

Working Papers from Regional Research Institute, West Virginia University

Abstract: The authors employ spatial econometric techniques and Annual Averages data from the U.S. Bureau of Labor Statistics for 1990-2004 to examine how changes in the minimum wage affect teen employment. Spatial econometric techniques account for the fact that employment is correlated across states. Such correlation may exist if a change in the minimum wage in a state affects employment not only in its own state but also in other, neighboring states. The authors show that state minimum wages negatively affect teen employment to a larger degree than is found in studies that do not account for this correlation. Their results show a combined direct and indirect effect of minimum wages on teen employment to be -2.1% for a 10% increase in the real effective minimum wage. Ignoring spatial correlation underestimates the magnitude of the effect of minimum wages on teen employment.

Keywords: spatial econometrics; minimum wage; correlation (search for similar items in EconPapers)
JEL-codes: C21 C31 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2011-08
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Citations: View citations in EconPapers (6)

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https://researchrepository.wvu.edu/rri_pubs/62/ (application/pdf)

Related works:
Journal Article: Minimum wages and teen employment: A spatial panel approach (2013)
Working Paper: Minimum Wages and Teen Employment: A Spatial Panel Approach (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:rri:wpaper:2011wp08

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