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Labor Market Connections, Minimum Wages, and Youth Employment

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  • Aspen Gorry

    (University of Chicago)

Abstract

We construct a labor search model where individuals can be either connected or unconnected. Connected workers get a higher rate of job offers when unemployed and are separated from their jobs at a lower rate than unconnected workers. Unconnected workers can become connected through employment. This model can account for age patterns in employment data. By introducing minimum wages, the model explains empirical findings on the effects of minimum wage laws. Finally, the model shows that minimum wages account for a large part of the differences in youth employment between Europe and the United States.

Suggested Citation

  • Aspen Gorry, 2008. "Labor Market Connections, Minimum Wages, and Youth Employment," 2008 Meeting Papers 794, Society for Economic Dynamics.
    • Handle: RePEc:red:sed008:794
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    References listed on IDEAS

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