| Description |
In this study, the employment to population ratios and unemployment rates of 16- 19- and 20-24-year-olds are modelled as a function of the minimum wage. The federal minimum remains constant while the state minimum increases in some states from 2010- 2019. Such a research question is useful because some labor economists claim minimum wages reduce welfare by reducing employment. Thus, the purpose of this study is to replicate previous research designs, and compare results with different studies using different methodologies. It finds a slightly positive bias in the estimated effect of the minimum wage which likely accrues from omitted variable bias, such as state-level employment trend variables. An interpretation of the results is discussed below, and reference is made to the Danube, Lester, and Reich study which claims to have found a solution to the problem of unobserved heterogeneity in minimum wage-employment effect studies. |
