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Minimum wage effects on youth employment in the European Union

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  • S. Laporšek

Abstract

The purpose of this article is to estimate minimum wage effects on youth employment in the European Union (EU). The analysis employs a panel regression method with fixed effects and uses data for 18 EU member states with statutory minimum wage over the period 1996 to 2011. The analysis is restricted to teenage workers between 15 and 19 years of age and young workers between 20 and 24 years of age. The study finds a negative, statistically significant impact of minimum wage on youth employment, by which the disemployment effect appears to be stronger for teenage workers. The effect remains negative and statistically significant also when controlled for other labour market institutions. Taking into account empirical results, we can conclude that EU countries should be more cautious when setting up minimum wages for young workers, as disemployment effects may have been downplayed.

Suggested Citation

  • S. Laporšek, 2013. "Minimum wage effects on youth employment in the European Union," Applied Economics Letters, Taylor & Francis Journals, vol. 20(14), pages 1288-1292, September.
    • Handle: RePEc:taf:apeclt:v:20:y:2013:i:14:p:1288-1292
    DOI: 10.1080/13504851.2013.799752
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    1. Peter Dolton & Chiara Rosazza Bondibene, 2012. "The international experience of minimum wages in an economic downturn [The tail of two countries: minimum wage and employment in France and the United-States]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 27(69), pages 99-142.
    2. David Neumark & William Wascher, 2004. "Minimum Wages, Labor Market Institutions, and Youth Employment: A Cross-National Analysis," ILR Review, Cornell University, ILR School, vol. 57(2), pages 223-248, January.
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