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The Effect of Minimum Wages on Youth Employment in Canada: A Panel Study

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  • Terence Yuen

Abstract

Previous U.S. panel estimates of minimum wage effects have been criticized on the grounds that their identification rests on comparisons of ‘‘low-wage’’ and ‘‘high-wage’’ workers. Using Canadian panel data for 1988–90, I compare estimates based on the traditional U.S. methodology with those based on samples of ‘‘low-wage’’ workers exclusively. The results would appear to vindicate the critics: The minimum wage effect from the latter approach is virtually zero. Yet, estimates from different subgroups of low-wage workers indicate that there is a significant disemployment effect for those with longer low-wage employment histories. This highlights the heterogeneity within low-wage workers and the importance of carefully defining the target group not solely based on workers’ wages.

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  • Terence Yuen, 2003. "The Effect of Minimum Wages on Youth Employment in Canada: A Panel Study," Journal of Human Resources, University of Wisconsin Press, vol. 38(3).
    • Handle: RePEc:uwp:jhriss:v:38:y:2003:i:3:p647-672
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