employment demand


The imposition of a national wage standard sets up a useful natural
experiment in which the "treatment effect" varies across states depending
on the fraction of workers earning less than the new minimum. I use this
idea to evaluate the effect of the April 1990 increase in the Federal
minimum wage on teenage wages, employment, and school enrollment.
Interstate variation in teenage wages was high at the end of the 1980s, in
part because 16 states had enacted state-specific minimums above the
prevailing Federal rate. Comparisons of grouped and individual state data
confirm that the rise in the minimum wage significantly increased teenage
wages. There is no evidence of corresponding losses in teenage employment
or changes in teenage school enrollment.

Year of Publication
Date Published
Publication Language
Citation Key
Industrial and Labor Relations Review, Vol 46, No. 1, October 1992
Card, D. (1992). Using Regional Variation in Wages to Measure the Effects of the Federal Minimum Wage. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01np1939183 (Original work published March 1992)
Working Papers