Long-Term Impact of Minimum Wages on Workers’ Careers: Evidence from Two Decades of Longitudinal Linked Employer–Employee Data

• Authors: Ana Rute Cardoso.
• Scandinavian Journal of Economics
• Labor Economics

We analyze the impact of high youth minimum wages, relying on two decades of linked employer–employee data and a major law change. Alternative treatment/control groups follow from two strands of the literature, one tracking low-skilled workers employed before the law change, who are eligible for a large wage increase, and one tracking the employment of full cohorts, whether working or in school when the law changed. High minimum wages led to a short-term wage gain, which faded over time. They did not jeopardize employment prospects. Changes in the hours worked by part-time workers point to increased job attachment.