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Do Minimum Wages Really Reduce Teen Employment? Accounting for Heterogeneity and Selectivity in State Panel Data: Do Minimum Wages Really Reduce Teen Employment?

ALLEGRETTO, SYLVIA A., DUBE, ARINDRAJIT, REICH, MICHAEL·2011·Industrial Relations: A Journal of Economy and Society

Abstract

Traditional estimates that often find minimum wage disemployment effects include controls for state unemployment rates and state- and year-fixed effects. Using CPS data on teens for the period 1990–2009, we show that such estimates fail to account for heterogeneous employment patterns that are correlated with selectivity among states with minimum wages. As a result, the estimates are often biased and not robust to the source of identifying variation. Including controls for long-term growth differences among states and for heterogeneous economic shocks renders the employment and hours elasticities indistinguishable from zero and rules out any but very small disemployment effects. Dynamic evidence further shows the nature of bias in traditional estimates, and it also rules out all but very small negative long-run effects. In addition, we do not find evidence that employment effects vary in different parts of the business cycle. We also consider predictable versus unpredictable changes in the minimum wage by looking at the effects of state indexation of the minimum wage.

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Metadata

Authors
ALLEGRETTO, S. A., DUBE, A., & REICH, M.
Venue
Industrial Relations: A Journal of Economy and Society
Publisher
Wiley
Published
2011-03-24
Volume
50
Issue
2
Pages
205-240
ISSN
0019-8676 (ISSN-L)
OpenAlex
W2136539811
Cited by
379
References
14
FWCI
57.96
Type
journal article
Language
en
Open access
closed

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CoChat. (2026). Citation check: Do Minimum Wages Really Reduce Teen Employment? Accounting for Heterogeneity and Selectivity in State Panel Data: Do Minimum Wages Really Reduce Teen Employment? https://app.cochat.ai/papers/10.1111/j.1468-232x.2011.00634.x
The paper
ALLEGRETTO, S. A., DUBE, A., & REICH, M. (2011). Do Minimum Wages Really Reduce Teen Employment? Accounting for Heterogeneity and Selectivity in State Panel Data: Do Minimum Wages Really Reduce Teen Employment? Industrial Relations: A Journal of Economy and Society. https://doi.org/10.1111/j.1468-232x.2011.00634.x

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