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Effects of Local, State, and Federal Minimum Wage on Employment Growth among Teenagers in the Restaurant Industry

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  • Shaun Gilyard

    (West Virginia University)

  • Marta Podemska-Mikluch

    (Gustavus Adolphus College)

Abstract

Over the last 20 years, local municipalities have been implementing minimum wage ordinances at an accelerated rate. These local changes, along with state and federal minimum wage increases, are included in the examination of the impact of minimum wage hikes on employment growth of teenagers in the food services and drinking places subsector. While most minimum wage research focuses on employment levels, recent contributions highlight the importance of analyzing employment growth. Following this trend, this study focuses on teenagers within the restaurant industry to test for the impact of minimum wages on inexperienced workers. Using a distributed-lag model, the results show that an increase in a minimum wage reduces employment growth for teenagers within this subsector. The effects of minimum wages within this demographic were most strongly felt in the first three years following an increase in minimum wage. Specifically, the results show that a 10% increase in the minimum wage decreases the employment growth rate by approximately 2.27% over a period of three years.

Suggested Citation

  • Shaun Gilyard & Marta Podemska-Mikluch, 2020. "Effects of Local, State, and Federal Minimum Wage on Employment Growth among Teenagers in the Restaurant Industry," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 26(1), pages 89-101, February.
    • Handle: RePEc:kap:iaecre:v:26:y:2020:i:1:d:10.1007_s11294-020-09770-8
    DOI: 10.1007/s11294-020-09770-8
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    More about this item

    Keywords

    Minimum wage; Employment growth; City ordinances; Earnings;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects

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