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Studies of the Effect of Minimum Wages on Teenage Employment

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Essay

Studies of the effect of minimum wages on teenage employment typically regress the teenage employment to population ratio on the real minimum wage or the minimum wage relative to average hourly earnings using OLS. Assume that you have a cross section of United States for two years. Do you think that there are problems with simultaneous equation bias?


Definitions:

Level Of Use

Level of use refers to the degree or extent to which a resource, service, or facility is utilized.

Salvage Value

The estimated residual value of an asset at the end of its useful life.

Double Declining-Balance Depreciation

An accelerated depreciation method that doubles the rate of straight line depreciation.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the asset's consumption or loss of value.

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