An Evaluation of Recent Evidence on the Employment Effects of Minimum and Subminimum Wages / David Card, Lawrence F. Katz, Alan B. Krueger.

Format:

Book

Author/Creator:

Card, David.

Contributor:

National Bureau of Economic Research.

Katz, Lawrence F.

Krueger, Alan B.

Series:

Working Paper Series (National Bureau of Economic Research) no. w4528.

NBER working paper series no. w4528

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1993.

Summary:

We re-examine recent cross-state evidence on the employment effect of the minimum wage. A re-evaluation of the data used in Neumark and Wascher's (1992) study of the minimum wage provides no support for their conclusion that the minimum wage has an adverse effect on teenage employment. Neumark and Wascher's findings are shown to be due to an inadvertent mistake in the definition of their school enrollment variable. In addition, Neumark and Wascher's coverage-weighted relative minimum wage index is shown to be negatively correlated with average teenage wages. We also re-analyze the experiences of individual states following the April 1990 increase in the Federal minimum wage, allowing for a full year lag in the effect of the law and controlling for changes in (properly measured) enrollment rates. These changes actually strengthen Card's (1992a) conclusion that the 1990 increase in the Federal minimum had no adverse employment effect. Lastly, we find that subminimum wages are rarely used, casting doubt on the claim that subminimum wage provisions temper any employment losses attributable to the minimum wage.

Notes:

Print version record

November 1993.