Effects of Minimum Wages on the Age Composition of Youth Employment.

Finis Welch, J. Cunningham

Expert InsightsPublished 1975

Examines the effect of minimum wage laws on teenage employment, using data by state from the 1/100 Public Use Sample of the 1970 Census. Wage legislation has increased the costs of employing teenagers and, therefore, has reduced their employment. Effects are more pronounced for younger teenagers and in geographic regions where average wages are low. This study reports estimated employment effects of wage minima for three groups of teenagers, those 14-15, 16-17, and 18-19 years old. Estimated gross employment elasticities are decomposed into substitution and scale effects in an effort to determine the impact of age-based minimum wage differentials. Lower minima for young workers would increase total teenage employment. Large errors of estimation preclude precise statements of effects on these teenagers to whom differentials are not extended. 28 pp. Ref.

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Welch, Finis and J. Cunningham, Effects of Minimum Wages on the Age Composition of Youth Employment. Santa Monica, CA: RAND Corporation, 1975. https://www.rand.org/pubs/papers/P5468.html.
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