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

23 Pages Posted: 25 Mar 2020

See all articles by Shaun Gilyard

Shaun Gilyard

West Virginia University

Marta Podemska-Mikluch

Gustavus Adolphus College

Date Written: February 2020

Abstract

Over the last twenty 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. This study follows the new approach aforementioned, focusing 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 findings suggest that the effects of minimum wages within this demographic are most strongly felt in the first three years following an increase in minimum wage. Specifically, the results show that a 10% increase in a minimum wage decreases the employment growth rate by approximately 2.27% over a period of three years.

Keywords: Minimum wage, employment growth, city ordinances, earnings

JEL Classification: J31, J38, J63, H73

Suggested Citation

Gilyard, Shaun and Podemska-Mikluch, Marta, The Effects of Local, State, and Federal Minimum Wage on Employment Growth among Teenagers in the Restaurant Industry (February 2020). International Advances in Economic Research, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3538842

Shaun Gilyard (Contact Author)

West Virginia University ( email )

Morgantown, WV
United States

Marta Podemska-Mikluch

Gustavus Adolphus College ( email )

800 West College Ave.
Saint Peter, MN Mn 56082
United States
(507) 933-6120 (Phone)

HOME PAGE: http://www.podemska.com

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