Do Minimum Wages Really Increase Youth Drinking and Drunk Driving?

47 Pages Posted: 4 Apr 2015

See all articles by Joseph J. Sabia

Joseph J. Sabia

San Diego State University - Department of Economics

M. Melinda Pitts

Federal Reserve Bank of Atlanta

Laura M. Argys

University of Colorado at Denver - Department of Economics

Date Written: November 2014

Abstract

Adams, Blackburn, and Cotti (ABC) found that increases in minimum wages were positively related to drunk driving–related traffic fatalities for those ages 16 to 20. The hypothesized mechanism for this relationship — increased alcohol consumption caused by minimum wage-induced income gains — remains empirically unexplored. Using data from two national behavioral surveys and an identification strategy identical to ABC, we find little evidence that an increase in the minimum wage leads to increases in alcohol consumption or drunk driving among teenagers. These results suggest a much smaller set of plausible causal channels to explain ABC's findings.

Keywords: minimum wage, teen drunk driving, alcohol consumption

JEL Classification: J38, K42

Suggested Citation

Sabia, Joseph J. and Pitts, M. Melinda and Argys, Laura M., Do Minimum Wages Really Increase Youth Drinking and Drunk Driving? (November 2014). FRB Atlanta Working Paper No. 2014-20. Available at SSRN: https://ssrn.com/abstract=2580472 or http://dx.doi.org/10.2139/ssrn.2580472

Joseph J. Sabia (Contact Author)

San Diego State University - Department of Economics ( email )

5500 Campanile Drive
San Diego, CA 92182
United States

M. Melinda Pitts

Federal Reserve Bank of Atlanta ( email )

1000 Peachtree Street, NE
Atlanta, GA 30309-4470
United States
404-498-7009 (Phone)
404-498-8956 (Fax)

Laura M. Argys

University of Colorado at Denver - Department of Economics ( email )

Campus Box 181
P.O. Box 173364
Denver, CO 80217-3364
United States
303-556-3547 (Fax)

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