The New Economics of the Minimum Wage - Another Finding that the Demand for Unskilled Labor Slopes Down

From Kalenkoski and Lacombe comes this new paper on the effect of the minimum wage on teenage employment.

Abstract:  The relationship between minimum wage increases and youth employment is investigated using county-level data and spatial econometric techniques. Results that account for spatial correlation indicate that a 10% increase in the effective minimum wage is associated with a 3.2% decrease in youth employment, a result that is 28% higher than the corresponding estimate that does not control for spatial correlation. Thus, estimates that do not take into account spatial correlation may significantly underestimate the negative effect of the minimum wage on teenage employment. Improperly controlling for factors that vary systematically over space can lead to incorrect inferences and misinform policy.

I could not find an ungated version.  Via DOL

Update:  Here's an ungated version, via Prof. Lacombe.

Comments

[Donald Lacombe]

Thank you for mentioning our paper. An ungated version can be located here:

http://oak.cats.ohiou.edu/~lacombe/papers/jlr294.pdf