Why do you think it wouldn't simply make younger people more competitive than older people?
Yes and no. I have a certain perspective on this as I was involved in hiring not long ago.
I mean no offense to younger folks here on the board, but we found it was extremely darn difficult to find under-21's with ANY work ethic at all. Now and again you'd find a diamond-in-the-rough who would do the job well, but most of our hires under 21 (and tbh in recent years, nearly half of our hires 21-24) ranged from barely worth the trouble to frigging useless.
The large majority could not be induced to put their smartphones down and stop texting, gaming or etc for even a whole hour, by either threat or reward. They ignored rules and procedure, did unsafe things, got into arguments with the public, created drama and conflict within the office among employees, were absent without calling in frequently, came in late, quit working early, took excessive breaks, did shoddy work, failed to complete paperwork or even file it (even important paperwork), and even the ones that actually WORKED created so many other problems that they were not worth keeping.
As I said, there were exceptions... but you could hire someone in their mid-20s or older and have a very good chance of getting a worthwhile employee, while hiring someone under 21 was about a 90% likelihood of getting an employee that was worthless.
Now granted, we're talking about a job situation where the employee is NOT under constant supervision every minute, and has to be capable of self-direction and keeping up with their own crap. Burger-flipping is different, if you screw up or goof off you're right there under your manager's eye. Our biz requires people who will keep to the job and do it right even when they're not being watched all the time.
Personally I don't think THAT large of a difference (per OP) would work... that's almost
double. But let's say it was $8/hr vs $10/hr.... as someone who's done hiring, I'd be more inclined to hire an over-21 than an under-21 even if it cost 25% more.
Personally I'd say a three-tiered system would be better.... $6/hr for under 18, $8/hr for 18-20, $10/hr for 21+. The quality of worker you're likely to get would tend to even out the pay diff.