Comment on David Neumark and William Wascher, "Employment Effects of Minimum and Subminimum Wages: Panel Data on State Minimum Wage Laws." (Industrial Relations Law Review, vol. 45, p. 55)

From: Industrial and Labor Relations Review | Date: April 1, 1994| Author: Card, David; Katz, Lawrence F.; Krueger, Alan B. | Copyright information

David Neumark and William Wascher err in their conclusion that higher minimum wages lead to significantly less teenage employment. Three flaws in research led to this erroneous conclusion. Neumark and Wascher mismeasured their school enrollment variable by operating on the incorrect assumption that teenagers either go to school or work. The two measured the minimum wage's effect with a coverage-weighted relative minimum wage index which was negatively correlated with teenage workers' wages. T...

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