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Effects of collective minimum wages on youth employment in Austria

Author

Listed:
  • Michael Christl

    (Agenda Austria)

  • Monika Köppl-Turyna

    (Agenda Austria)

  • Dénes Kucsera

    (Agenda Austria)

Abstract

This paper analyzes the impact of collective minimum wages on youth employment for 14 sectors of the Austrian economy, taking into account the possibility of nonlinearity. We find that when the real index of minimum wage rises above a certain point, negative employment effects for young individuals (aged between 19 and 25 years) can be expected in Austria. In five of seven market sectors the minimum wage lies above the optimal level that maximizes the employment of young workers.

Suggested Citation

  • Michael Christl & Monika Köppl-Turyna & Dénes Kucsera, 2017. "Effects of collective minimum wages on youth employment in Austria," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 44(4), pages 781-805, November.
    • Handle: RePEc:kap:empiri:v:44:y:2017:i:4:d:10.1007_s10663-016-9341-7
    DOI: 10.1007/s10663-016-9341-7
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    References listed on IDEAS

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    1. 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.
    2. Ana Rute Cardoso & Pedro Portugal, 2005. "Contractual Wages and the Wage Cushion under Different Bargaining Settings," Journal of Labor Economics, University of Chicago Press, vol. 23(4), pages 875-902, October.
    3. Christian Ragacs, 2003. "Mindestlöhne und Beschäftigung: Ein Überblick über die neuere empirische Literatur," Working Papers geewp25, Vienna University of Economics and Business Research Group: Growth and Employment in Europe: Sustainability and Competitiveness.
    4. David Neumark & William Wascher, 2006. "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research," Working Papers 060708, University of California-Irvine, Department of Economics, revised Jan 2007.
    5. Brown, Alessio J.G. & Merkl, Christian & Snower, Dennis J., 2014. "The minimum wage from a two-sided perspective," Economics Letters, Elsevier, vol. 124(3), pages 389-391.
    6. Ragacs, Christian, 1993. "Minimum Wages in Austria: Estimation of Employment Functions," Department of Economics Working Paper Series 20, WU Vienna University of Economics and Business.
    7. Christl Michael & Köppl-Turyna Monika & Kucsera Dénes, 2018. "Revisiting the Employment Effects of Minimum Wages in Europe," German Economic Review, De Gruyter, vol. 19(4), pages 426-465, December.
    8. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    9. Ragacs, Christian, 1993. "Employment, productivity, output and minimum wage in Austria: a time series analysis," Department of Economics Working Paper Series 21, WU Vienna University of Economics and Business.
    10. Baker, Michael & Benjamin, Dwayne & Stanger, Shuchita, 1999. "The Highs and Lows of the Minimum Wage Effect: A Time-Series Cross-Section Study of the Canadian Law," Journal of Labor Economics, University of Chicago Press, vol. 17(2), pages 318-350, April.
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    Cited by:

    1. Michael Christl & Monika Köppl-Turyna & Dénes Kucsera, 2019. "Employment Effects of Minimum Wages," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 16(04), pages 01-08, January.
    2. Monika Köppl-Turyna & Michael Christl & Dénes Kucsera, 2019. "Employment Effects of Minimum Wages: the Dose Makes the Poison," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 72(02), pages 40-46, January.
    3. Ondřej Dvouletý & Martin Lukeš & Mihaela Vancea, 2020. "Individual-level and family background determinants of young adults’ unemployment in Europe," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 47(2), pages 389-409, May.
    4. Stefan Ederer & Josef Baumgartner & Marian Fink & Serguei Kaniovski & Christine Mayrhuber & Silvia Rocha-Akis, 2017. "Effekte der Einführung eines flächendeckenden Mindestlohnes in Österreich," WIFO Studies, WIFO, number 60570, April.
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    More about this item

    Keywords

    Minimum wage; Employment; Young workers; Austria; Collective bargaining;
    All these keywords.

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy

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