tag:blogger.com,1999:blog-2830084253401570472.post7849865592633894683..comments2024-03-28T09:22:36.967+13:00Comments on Offsetting Behaviour: The younger cohort drives it [updated]Eric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-2830084253401570472.post-67458409226735042032011-08-30T14:19:46.508+12:002011-08-30T14:19:46.508+12:00@Michael: Alan Krueger is an awesome choice. He ha...@Michael: Alan Krueger is an awesome choice. He has indeed written papers finding no effect on US restaurant employment of changes in minimum wages over a period in which minimum wages were low relative to average wages. I believe his results as far as they apply. But if labour demand is less elastic in restaurant trade than elsewhere, and if we don't really expect minimum wages to bite hard if they're very low, then I don't see much reason to expect the results to apply to NZ where minimum wages are half the average.<br /><br />@Rob: I'm just going to go ahead and hoist this one into another post. 'Till I get around to that though, a couple points:<br />1) In we look at specifications with unemployment rates instead of number employed as dependent variable, both the shift term and the interaction term are significant for 16 & 17 year olds but neither is significant for 18 & 19 year olds. But, the shift variable is negative.<br />2) No huge differences in R-sq when looking at OLS specs rather than Newey<br />3) I'd say not global recession because the adult unemployment rate already picks up recession effects. Prior recessions in NZ were far worse for adult employment and had far better youth outcomes. But you're right; I can't definitely exclude alternative coincidental things. But the differential responsiveness of 16-17 year olds to 18-19 year olds suggests minimum wages.Eric Cramptonhttps://www.blogger.com/profile/15831696523324469713noreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-84563908979463328872011-08-30T12:52:43.991+12:002011-08-30T12:52:43.991+12:00Hi Eric
Long-time reader, first-time caller...
I...Hi Eric<br /><br />Long-time reader, first-time caller...<br /><br />I have three questions:<br /><br />1. In the second set of regressions, why do we seem to care only about the interactive term and not about the constitutive term for the date indicator? I would have thought the youth minimum wage explanation would imply BOTH a slope shift for young people relative to adults, AND also an intercept shift, meaning consistently more youth unemployment at any level of adult unemployment. How would interpret the non-performance of the constitutive term?<br /><br />2. I notice the cohort size term is much weaker for 15 and 16 year olds than for the other, I guess reflecting that most people in those younger cohorts are in school. Are goodness of fit measures also substantially weaker for those groups than for the older cohorts? If so, does that lead you to worry a bit about the overall performance of those two models in particular?<br /><br />3. How can we be confident that the effects on the indicator and indicator interaction terms are picking up the the imp[act of minimum wage changes rather other concurrent events such as, say, the global recession? I think you can make a pretty reasonable argument that massive recessions hit new workers especially hard (because of broadly LIFO personnel management in many sectors), and those new workers tend to be young. The younger they are, the newer they are likely to be. That argument would, I think, also be consistent with your empirics.<br /><br />Cheers,<br />RobRob Salmondnoreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-52155825803538411002011-08-30T07:27:10.665+12:002011-08-30T07:27:10.665+12:00Hi Eric,
It's been over ten years since I di...Hi Eric, <br /><br />It's been over ten years since I did labour economics, but obamas new economic advisor sounds familiar. I seem to remember he wrote one of the more controversial papers at the time. <br /><br />MichaelMichaelnoreply@blogger.com