Advanced Search
MyIDEAS: Login

Young Employment, Job-Skill Composition and Minimum Wages: Evidence from a 'Natural Experiment'

Contents:

Author Info

Abstract

Empirically very little is known about the impact of an increase in the minimum wage of young workers on the job-skill composition. This is an important question because small (or zero) effects on teenage employment may mask a substitution of more for less-skilled teenagers. Therefore, the estimation of the elasticity of substitution between skilled and unskilled workers is required. This paper will consider the increase in the minimum wage of young workers that took place in Portugal on the 1st January, 1987. This change is of particular interest, not only because it was so large (33% in real terms) and affected a significant share of workers under 20 years old (about 20%), but also because it motivated a decrease in the wage premium earned by young skilled workers from 1.24 to 1.20. The results are consistent with the view that the minimum wage increase had some negative impact on employment of unskilled workers, the most affected group: an increase of 1% in wage induced by the increase in minimum wage reduces employment of this group of workers between 0.42% to 0.47%. Nevertheless, this negative impact was partially compensated by the substitution of more for less-skilled teenagers, because there is some evidence that the elasticity of substitution between young workers with different skills is different from zero.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www3.eeg.uminho.pt/economia/nipe/docs/2008/NIPE_WP_4_2008.PDF
Download Restriction: no

Bibliographic Info

Paper provided by NIPE - Universidade do Minho in its series NIPE Working Papers with number 04/2008.

as in new window
Length:
Date of creation: 2008
Date of revision:
Handle: RePEc:nip:nipewp:04/2008

Contact details of provider:
Postal: Núcleo de Investigação em Políticas Económicas, Escola de Economia e Gestão, Universidade do Minho, P-4710-057 Braga, Portugal
Phone: +351-253604510 ext 5532
Fax: +351-253601380
Email:
Web page: http://www3.eeg.uminho.pt/economia/nipe/versao_inglesa/index_uk.htm
More information through EDIRC

Order Information:
Email:

Related research

Keywords:

This paper has been announced in the following NEP Reports:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Natália P. Monteiro & Paulo Bastos, 2009. "Managers and wage policies," NIPE Working Papers 2/2009, NIPE - Universidade do Minho.
  2. Alexandre, Fernando & Portela, Miguel & Sá, Carla, 2008. "Admission Conditions and Graduates' Employability," IZA Discussion Papers 3530, Institute for the Study of Labor (IZA).

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:nip:nipewp:04/2008. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maria João Thompson).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.