TY - JOUR

T1 - Declining teen employment

T2 - minimum wages, returns to schooling, and immigration

AU - Neumark, David

AU - Shupe, Cortnie Anne

PY - 2019/8

Y1 - 2019/8

N2 - We explore the decline in teen employment in the United States since 2000, which was sharpest for 16–17 year-olds. We consider three main explanatory factors: a rising minimum wage that could reduce employment opportunities for teens and potentially increase the value of investing in schooling; rising returns to schooling; and increasing competition from immigrants that, like the minimum wage, could reduce employment opportunities and possibly also raise the returns to human capital investment. We find that, among these factors, higher minimum wages are the predominant factor explaining changes in the schooling and workforce behavior of 16–17 year-olds since 2000. The employment decline arises from a combination of a lower likelihood of being both employed and enrolled in school, and a higher likelihood of being enrolled in school only (not employed). These effects are consistent with the minimum wage leading students to increase their focus on schooling to meet a higher productivity standard for jobs with a higher minimum wage.

AB - We explore the decline in teen employment in the United States since 2000, which was sharpest for 16–17 year-olds. We consider three main explanatory factors: a rising minimum wage that could reduce employment opportunities for teens and potentially increase the value of investing in schooling; rising returns to schooling; and increasing competition from immigrants that, like the minimum wage, could reduce employment opportunities and possibly also raise the returns to human capital investment. We find that, among these factors, higher minimum wages are the predominant factor explaining changes in the schooling and workforce behavior of 16–17 year-olds since 2000. The employment decline arises from a combination of a lower likelihood of being both employed and enrolled in school, and a higher likelihood of being enrolled in school only (not employed). These effects are consistent with the minimum wage leading students to increase their focus on schooling to meet a higher productivity standard for jobs with a higher minimum wage.

KW - Faculty of Social Sciences

KW - Employment

KW - Schooling

KW - Minimum wages

KW - Immigration

U2 - 10.1016/j.labeco.2019.03.008

DO - 10.1016/j.labeco.2019.03.008

M3 - Journal article

VL - 59

SP - 49

EP - 68

JO - Labour Economics

JF - Labour Economics

SN - 0927-5371

ER -