Minimum wages: do they really hurt young people?
AbstractWe estimate the effects of a significant increase in the minimum wage in Spain between 2004 and 2010 on the individual probability of losing employment, using a large panel of social security records. Our main finding is that older people experienced the largest increase in the probability of losing their job, when compared with other age groups, including young people. The intuition is simple: among the affected (low-productivity) workers, young people are expected to increase their productivity more than older ones, who are in the flat part of their life-cycle productivity curve. Consequently, an employer facing a uniform increase in the minimum wage may find it profitable to retain young employees and to fire older ones
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Bibliographic InfoPaper provided by Banco de EspaÃ±a in its series Banco de EspaÃ±a Working Papers with number 1237.
Length: 30 pages
Date of creation: Oct 2012
Date of revision:
Minimum wage; labour demand; firing;
Find related papers by JEL classification:
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
- J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-11-03 (All new papers)
- NEP-BEC-2012-11-03 (Business Economics)
- NEP-EEC-2012-11-03 (European Economics)
- NEP-EUR-2012-11-03 (Microeconomic European Issues)
- NEP-LAB-2012-11-03 (Labour Economics)
- NEP-LMA-2012-11-03 (Labor Markets - Supply, Demand, & Wages)
You can help add them by filling out this form.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Minimum wage increases hurt the old, not the young
by Economic Logician in Economic Logic on 2012-11-23 15:34:00
by himaginary in himaginaryの日記 on 2012-12-09 08:00:00
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