Graduate Program

Economics

Degree Name

Master of Arts (MA)

Semester of Degree Completion

2005

Thesis Director

Dell Champlin

Thesis Committee Member

Lawrence Bates

Thesis Committee Member

Mukti Upadhyay

Abstract

Youth aged from 16 to 24 is the group that is most likely to hold minimum wage jobs. A concern of economists and policy makers is: 1) whether the employment opportunities to youth are discouraged by the minimum wage and 2) how the minimum wage influences their choice over work or study. This study advances and combines some ideas from previous studies to examine the effects of the state minimum wages upon youth employment and behavior patterns over school and work. The study concentrates on conditions in the states of Washington and Connecticut during the period of 1998 to 2003, where the state minimum wages not only were higher than the federal minimum wage but continued to increase after 1997 and where the accumulated influence of the state minimum wage could be captured. Individual level datasets from the Current Population Survey (CPS) are used in multi-nominal logistic models to test the probabilities of youth being located in the various school-work categories during the sample period.

Results suggest that an increase of the state minimum wage would probably make youth move out of jobs and enroll in schools. Compared to the minimum wage, individual considerations, such as family background and age, are the stronger determinants for choices of youth. It is implied from this research that the increase of the state minimum wages could have quite different impacts on youth behavior patterns among different states quite likely because of the diverse composition of youth across states.

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