EMPLOYMENT EFFECTS OF MINIMUM AND SUBMINIMUM WAGES - PANEL DATA ON STATE MINIMUM-WAGE LAWS

Using panel data on state minimum wage laws and economic conditions for the years 1973-89, the authors reevaluate existing evidence on the effects of a minimum wage on employment. Their estimates indicate that a 10% increase in the minimum wage causes a decline of 1-2% in employment among teenagers and a decline of 1.5-2% in employment for young adults, similar to the ranges suggested by earlier time-series studies. The authors also find evidence that youth subminimum wage provisions enacted by state legislatures moderate the disemployment effects of minimum wages on teenagers.