Happy Birthday, You're Fired! The Effects of an Age-Dependent Minimum Wage on Youth Employment Flows in the Netherlands

Kabátek, Jan

doi:10.2139/ssrn.2717468

Cited by 4 publications

(3 citation statements)

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“…). Third, further research might find a useful role for a minimum wage that applies to only a subset of the working population, such as industry‐ or age‐specific minimum wages (see also Kabátek ; Kreiner et al . ).…”

Section: Resultsmentioning

confidence: 99%

Is a Minimum Wage an Appropriate Instrument for Redistribution?

Gerritsen

Jacobs

2019

Economica

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We analyse the redistributional (dis)advantages of a minimum wage over income taxation in competitive labour markets without imposing assumptions on the (in)efficiency of labour rationing. Compared to a distributionally equivalent tax change, a minimum‐wage increase raises involuntary unemployment, but also raises skill formation as some individuals avoid unemployment. A minimum wage is an appropriate instrument for redistribution if and only if the public revenue gains from additional skill formation outweigh both the public revenue losses from additional unemployment and the utility losses of inefficient labour rationing. We show that this critically depends on how labour rationing is distributed among workers. A necessary condition for the desirability of a minimum‐wage increase is that the public revenue gains from higher skill formation outweigh the revenue losses from higher unemployment. We write this condition in terms of measurable sufficient statistics.

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Section: Resultsmentioning

confidence: 99%

Is a Minimum Wage an Appropriate Instrument for Redistribution?

Gerritsen

Jacobs

2019

Economica

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“…Another common empirical approach used in the literature is RDD. Exploiting the discontinuities of a stepwise minimum wage structure in the Netherlands applicable to 15–23-year-old workers, Kabatek (2021) finds a significant increase in job separation rates around the discontinuity points. Similarly, Olssen (2011) examining how a 10% increase in minimum wage for each year until age 21 affects the employment of 15–21-year-old workers in Australia, arrives at the conclusion that increases in minimum wage do not significantly affect youth hours of work.…”

Section: Related Literaturementioning

confidence: 99%

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

Dayıoğlu

Kucukbayrak

Tümen

2022

IJM

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PurposeUsing 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.

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“…44 SeeChoi and Fernández-Blanco (2016).45 Like with the general literature on employment effects, there is conflicting evidence on whether or not the relative magnitudes of these two effects lead, on net, to employment declines. Also, note thatKabátek's (2015) evidence for the Netherlands differs in finding a separation effect of minimum wage increases at specific ages.…”

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confidence: 92%

The Econometrics and Economics of the Employment Effects of Minimum Wages: Getting from Known Unknowns to Known Knowns

Neumark

2019

German Economic Review

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I discuss the econometrics and the economics of past research on the effects of minimum wages on employment in the United States. My intent is to try to identify key questions raised in the recent literature, and some from the earlier literature, which I think hold the most promise for understanding the conflicting evidence and arriving at a more definitive answer about the employment effects of minimum wages. My secondary goal is to discuss how we can narrow the range of uncertainty about the likely effects of the large minimum wage increases becoming more prevalent in the United States. I discuss some insights from both theory and past evidence that may be informative about the effects of high minimum wages, and try to emphasize what research can be done now and in the near future to provide useful evidence to policymakers on the results of the coming high minimum wage experiment, whether in the United States or in other countries.

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Happy Birthday, You're Fired! The Effects of an Age-Dependent Minimum Wage on Youth Employment Flows in the Netherlands

Cited by 4 publications

References 10 publications

Is a Minimum Wage an Appropriate Instrument for Redistribution?

Is a Minimum Wage an Appropriate Instrument for Redistribution?

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

The Econometrics and Economics of the Employment Effects of Minimum Wages: Getting from Known Unknowns to Known Knowns

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