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The impact of age-specific minimum wages on youth employment and education: a regression discontinuity analysis

The impact of age-specific minimum wages on youth employment and education: a regression... Using a regression discontinuity design in tandem with a difference-in-discontinuities analysis, the study finds that increasing the minimum wage reduces the employment probability of young males by 2.5–3.1 percentage points.Design/methodology/approachThe authors exploit an age-specific minimum wage rule – which sets a lower minimum wage for workers of age 15 than the adult minimum wage paid to workers of age 16 and above – and its abolition to estimate the causal effect of a minimum wage increase on youth employment and education in Turkey.FindingsThe authors also document that, initially, the minimum wage increase does not lead to a major change in high school enrollment, while the likelihood of transitioning into “neither in employment nor in education and training” (NEET) category notably increases. However, in the medium term, the NEET effect is transitory; school enrollment increases over time and absorbs the negative employment effect.Originality/valueThe authors argue that policy effects have mostly been driven by demand-side forces rather than the supply side. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Manpower Emerald Publishing

The impact of age-specific minimum wages on youth employment and education: a regression discontinuity analysis

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References (54)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
0143-7720
DOI
10.1108/ijm-02-2021-0079
Publisher site
See Article on Publisher Site

Abstract

Using a regression discontinuity design in tandem with a difference-in-discontinuities analysis, the study finds that increasing the minimum wage reduces the employment probability of young males by 2.5–3.1 percentage points.Design/methodology/approachThe authors exploit an age-specific minimum wage rule – which sets a lower minimum wage for workers of age 15 than the adult minimum wage paid to workers of age 16 and above – and its abolition to estimate the causal effect of a minimum wage increase on youth employment and education in Turkey.FindingsThe authors also document that, initially, the minimum wage increase does not lead to a major change in high school enrollment, while the likelihood of transitioning into “neither in employment nor in education and training” (NEET) category notably increases. However, in the medium term, the NEET effect is transitory; school enrollment increases over time and absorbs the negative employment effect.Originality/valueThe authors argue that policy effects have mostly been driven by demand-side forces rather than the supply side.

Journal

International Journal of ManpowerEmerald Publishing

Published: Aug 22, 2022

Keywords: Age-specific minimum wages; Youth employment; Education; Regression discontinuity design; J21; J24; J31; J38

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