NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

An Evaluation of Recent Evidence on the Employment Effects of Minimum and Subminimum Wages

David Card, Lawrence F. Katz, Alan B. Krueger

NBER Working Paper No. 4528
Issued in November 1993
NBER Program(s):   LS

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.

download in pdf format
   (2172 K)

download in djvu format
   (176 K)

email paper

This paper is available as PDF (2172 K) or DjVu (176 K) (Download viewer) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Published: Industrial and Labor Relations Review, April 1994, Vol. 47, No. 3, pp. 487- 496.

Users who downloaded this paper also downloaded these:
Card and Krueger w4509 Minimum Wages and Employment: A Case Study of the Fast Food Industry in New Jersey and Pennsylvania
Neumark and Wascher w4570 Employment Effects of Minimum and Subminimum Wages: Reply to Card, Katz and Krueger
Card w3710 Do Minimum Wages Reduce Employment? A Case Study of California, 1987-89
Neumark and Wascher w12663 Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research
Neumark and Wascher w3859 Evidence on Employment Effects of Minimum Wages and Subminimum Wage Provisions From Panel Data on State Minimum Wage Laws
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us