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Minimum Wage And Youth Employment Rates, 2000-2008

Author

Listed:
  • MAITE BLÁZQUEZ CUESTA

    (Universidad Autónoma de Madrid)

  • RAQUEL LLORENTE HERAS

    (Universidad Autónoma de Madrid)

  • JULIÁN MORAL CARCEDO

    (Universidad Autónoma de Madrid)

Abstract

The existence of a universal minimum wage has been, and continues to be, an intensely debated issue. On the one hand, the controversy surrounding a minimum wage appears to be partly justified because the effects of the introduction and increase of a minimum wage may differ greatly depending on the labour market structure. On the other, the current academic literature does not provide clear evidence of which collectives are likely to be more affected in terms of employment by the introduction or increase of a minimum wage. Using the data for the period 2000-2008, this study aims to examine the effect of a minimum wage on youth employment in Spain, taking into account both regional differences and the dynamic behaviour of employment. Unlike previous papers on this subject, we additionally consider the effect of seasonality on employment, a particularly widespread feature of youth employment in Spain. The results obtained in our analysis do not provide clear evidence of any negative effect of a minimum wage on youth employment during the period under study. While this result may point to the existence of a monopsonistic structure of the labour market, the coexistence of increases both in the minimum wage and in youth employment rate during this period could also be explained in the light of a perfectly competitive labour market with a high degree of dynamism and a structural change in employment demand.

Suggested Citation

  • Maite Blázquez Cuesta & Raquel Llorente Heras & Julián Moral Carcedo, 2011. "Minimum Wage And Youth Employment Rates, 2000-2008," Revista de Economia Aplicada, Universidad de Zaragoza, Departamento de Estructura Economica y Economia Publica, vol. 19(2), pages 35-57, Autumn.
    • Handle: RePEc:rev:reveca:v:19:y:2011:i:2:p:35-57
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    References listed on IDEAS

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    2. Tomas Kucera, 2020. "Are Employment Effects of Minimum Wage the Same Across the EU? A Meta-Regression Analysis," Working Papers IES 2020/2, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Jan 2020.
    3. Janine Berg (ed.), 2015. "Labour Markets, Institutions and Inequality," Books, Edward Elgar Publishing, number 16143.
    4. Grimshaw, Damian., 2014. "At work but earning less : trends in decent pay and minimum wages for young people," ILO Working Papers 994862833402676, International Labour Organization.
    5. Jiménez Martínez, Mónica & Jiménez Martínez, Maribel, 2021. "Are the effects of minimum wage on the labour market the same across countries? A meta-analysis spanning a century," Economic Systems, Elsevier, vol. 45(1).
    6. Gerhard Reinecke & Damian Grimshaw, 2015. "Labour market inequality between youth and adults: a special case?," Chapters, in: Janine Berg (ed.), Labour Markets, Institutions and Inequality, chapter 14, pages 361-398, Edward Elgar Publishing.

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    More about this item

    Keywords

    Employment rate; minimum wage; Kaitz index;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

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