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Minimum Wages, Labor Market Institutions, and Female Employment and Unemployment: A Cross-Country Analysis

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  • John T. Addison
  • Orgul Demet Ozturk

Abstract

The authors investigate the employment consequences of minimum wage regulation in 16 OECD countries, 1970-2008. Their treatment is motivated by Neumark and Wascher's (2004) seminal cross-country study using panel methods to estimate minimum wage effects among teenagers and young adults. Apart from the longer time interval examined, a major departure is the authors' focus on prime-age females, a group often neglected in the minimum wage literature. Another is their deployment of time-varying policy and institutional regressors. The average effects they report are consistent with minimum wages causing material employment losses among the target group. Indeed, higher minimum wages are also associated with elevated joblessness, although these unemployment effects are less precisely estimated. Further, although the authors find common ground with Neumark and Wascher as regards the role of some individual labor market institutions and policies, they do not observe the same patterns in the institutional data. Specifically, prime-age females do not exhibit stronger employment losses in countries with the least regulated markets.

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Bibliographic Info

Article provided by ILR Review, Cornell University, ILR School in its journal ILR Review.

Volume (Year): 65 (2012)
Issue (Month): 4 (October)
Pages: 779-809

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Handle: RePEc:ilr:articl:v:65:y:2012:i:4:p:779-809

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  1. Cahuc, Pierre & Zylberberg, André, 1999. "Job protection, minimum wage and employment," CEPREMAP Working Papers (Couverture Orange) 9914, CEPREMAP.
  2. John T. Addison & McKinley L. Blackburn & Chad D. Cotti, 2012. "The Effect of Minimum Wages on Labour Market Outcomes: County-Level Estimates from the Restaurant-and-Bar Sector," British Journal of Industrial Relations, London School of Economics, vol. 50(3), pages 412-435, 09.
  3. Coe, David T & Snower, Dennis J., 1997. "Policy Complementarities: The Case for Fundamental Labour Market Reform," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1585, C.E.P.R. Discussion Papers.
  4. Blanchard, Olivier & Wolfers, Justin, 2000. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 110(462), pages C1-33, March.
  5. Addison, John T. & Teixeira, Paulino, 2001. "The Economics of Employment Protection," IZA Discussion Papers 381, Institute for the Study of Labor (IZA).
  6. Bernhard Boockmann, 2010. "The Combined Employment Effects of Minimum Wages and Labor Market Regulation—a Meta-Analysis," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, Duncker & Humblot, Berlin, vol. 61(Supplemen), pages 167-188.
  7. Stephen Nickell & Luca Nunziata & Wolfgang Ochel, 2005. "Unemployment in the OECD Since the 1960s. What Do We Know?," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 115(500), pages 1-27, 01.
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Cited by:
  1. Bredemeier, Christian & Juessen, Falko, 2012. "Minimum Wages and Female Labor Supply in Germany," IZA Discussion Papers 6892, Institute for the Study of Labor (IZA).

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