an article by Dean R. Hyslop, David C. Maré, Steven Stillman and Jason Timmins (Victoria University of Wellington, New Zealand) published in LABOUR Volume 26 Issue 4 (December 2012)
Abstract
Substantial youth minimum wage changes in New Zealand between 2000 and 2007 raised teenage average wages by 5-10 per cent relative to those for adults.
We use Statistics New Zealand’s Linked Employer-Employee Database (LEED) to examine whether firms’ teenage labour demand responses to these changes are greater for firms with higher teenage-employment share.
We find evidence that high teen-employers reduced their teen employment relative to other firms and had lower survival rates over the period.
However, firms that entered the main teen-employment industries had higher teen-employment shares than continuing firms. The results are consistent with endogenous technology adoption in response to non-marginal changes in relative wages.
JEL classifications: J21, J23, J31, J38
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