The Effect of Minimum Wage on School Enrollment: Analysis Using Matched CPS Data

Abstract

While there has been much study on the effect of the minimum wage on variety of labor market outcomes, there has been little focus on the effect of minimum wage on school enrollment. In the body of literature, there have been few studies conducted after the late 1990’s and a fair number of these studies have reached conflicting conclusions. This paper attempts to contribute to the literature by studying the relationship between minimum wage and school enrollment with a variety of different specifications. Using matched panel data from the Current Population Survey (CPS), I find that an increase in the minimum wage has an overall negative effect on school enrollment and employment. In addition, I find that the effects may vary between males and females and that the effect of minimum wage likely operates on a lagged basis.