The Effect of the Minimum Wage on the Employment Rate in Canada, 1979-2016

Abstract

The main focus of this paper is to evaluate the impact of the minimum wage on the teenage employment rate using Canadian Labour Force Survey data (1979 – 2016). The impact is both economically and statistically significant. In particular, my findings suggest that a 10% increase in the minimum wage decreases the teenage employment rate by approximately 1.4 percentage points. There appears to be some lag effect of the minimum wage (up to 12 months). Finally, the results remain similar when broken down by gender, although slightly larger effects are found for males.