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Abstract
In 2016, the United States Congress created the possibility of lowering Puerto Rico‘s nominal minimum wage from $7.25 to $4.25 per hour for young people under the age of 25. This study evaluates the effect of changes in the minimum wage on inter-industrial employment in Puerto Rico, in the period from 1991 to 2010. Dynamic panel regressions were used as statistical methods for the evaluation of relations between variables. The results suggest that increases in the minimum wage are associated with increases in employment in the construction, transportation, and wholesale industries; in contrast, increases in the minimum wage are associated with reductions in employment, in industry such as manufacturing, services, and public administration.
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