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Youth Crime and the Minimum Wage

Andrew Kallem

Harvard University

March 18, 2004

This study examines the relationship between the minimum wage and youth criminal activity. I show that a priori economic reasoning cannot predict the sign of the relationship - while a minimum wage hike reduces the attractiveness of crime as a source of income relative to legitimate work, it may also disemploy young workers and so induce their participation in crime. I then present three empirical analyses to fill this gap: a panel approach using state-level data covering the period from 1982 to 2001, a cross-sectional examination of the varying impact of the 1990-1991 and 1996-1997 federal minimum wage hikes across states, and an investigation of self-reports of crime by respondents to the National Longitudinal Survey of Youth 1997. In each analysis I find evidence that the effect of the minimum wage on youth crime is negative for crimes that have a strong pecuniary component. This implies that any criminogenic disemployment impact of the minimum wage is outweighed by the incentives against crime that higher legitimate wages create for young workers.

Number of Pages in PDF File: 83

Keywords: Minimum wage, crime

JEL Classification: J22, J38

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Date posted: May 13, 2004  

Suggested Citation

Kallem, Andrew, Youth Crime and the Minimum Wage (March 18, 2004). Available at SSRN: https://ssrn.com/abstract=545382 or http://dx.doi.org/10.2139/ssrn.545382

Contact Information

Andrew Kallem (Contact Author)
Harvard University ( email )
Cambridge, MA 02138
United States
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