Empirical Evidence on the Practical Importance of Minimum Wage Laws

question 13

Multiple Choice

Empirical evidence on the practical importance of minimum wage laws suggests:

• A) that their impact on the employment level is nil.
• B) that their impact on employment is actually favourable because they put more money in the hands of poorly paid workers, stimulating consumer spending, thus promoting economic growth.
• C) that they do reduce the employment levels of younger and unskilled workers to a minor extent - a weak disemployment effect.
• D) that they succeed in raising the incomes of poor households.
• E) that they do reduce the employment levels of younger and unskilled workers to a major extent - a strong disemployment effect.

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Definitions:

Discriminant Validity

The extent to which a concept differs from other concepts that are similar, ensuring that the measure is not reflecting other variables.

Convergent Validity

The degree to which two measures of constructs that theoretically should be related, are in fact related.

Face Validity

refers to the extent to which a test or measure appears to assess what it is intended to measure, based on a superficial examination.

Concurrent Validity

The construct validity of a measure is assessed by examining whether groups of people differ on the measure in expected ways.