An Analysis of Teenage Employment by Firms: 1999/00-2006/7

Abstract

This paper uses data from Statistics New Zealand 's Linked Employer-Employee Database (LEED) to analyse the teenage employment responses of high teen employment firms in the four main teen employment industries to increasing relative wages of teen workers over the period 2000-2007, against a backdrop of substantial increases in the minimum wages for teenage workers. Among continuing firms, we find mixed evidence whether high teen- employers reduced their teen employment relative to other firms over the period. Analysing changes over the period as a whole, we estimate that initial high teen-employing firms reduced their subsequent teen employment by 2.5-3 percentage points for firms in the main teen-employing industries: however, analysing annual changes, we find small and insignificant effects for these firms. We also find preliminary evidence that high teen employment is associated with firm entry and exit: firms in the main teen-employing industries with high teen-employment at the beginning o f the period, had about a 3 percent lower survival rate than other firms: while firms entering the main teen-employing industries during the period had about 2 percent higher teen-employment shares in the final year than continuing firms.