We estimate the employment effects of changes in national minimum wages using a pooled cross-section time-series data set comprising sixteen OECD countries for the period 1975-1997. We pay particular attention to the impact of cross-country differences in minimum wage systems and in other labor market institutions and policies that may either reduce or amplify the effects of minimum wages. Overall, our results generally are consistent with the view that minimum wages cause employment losses among youth. However, the evidence also suggests that the employment effects of minimum wages vary considerably across countries. Disemployment effects of minimum wages appear to be smaller when there are subminimum wages for youths, while, in the longer run at least, minimum wages set by collective bargaining may entail more deleterious employment effects. We also find that government policies restricting employers' ability to adjust nonpecuniary characteristics of jobs (such as hours restrictions or work rules) tend to exacerbate the negative effects of minimum wages on youth employment, while countries with active labor market policies designed to bring non-employed individuals into the work force tend to exhibit smaller disemployment effects from minimum wages.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
7299.
Length: Date of creation: Aug 1999 Date of revision: Handle: RePEc:nbr:nberwo:7299
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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
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Richardson, S., 1998.
"Who Gets Minimum Wages?,"
CEPR Discussion Papers
386, Centre for Economic Policy Research, Research School of Social Sciences, Australian National University.
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