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The impact of the minimum wage on Spanish youth: Evidence from a natural experiment

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  • Antón, José-Ignacio
  • Muñoz de Bustillo, Rafael

Abstract

This work assesses the impact of the minimum wage on youth employment, unemployment and education enrolment in Spain. Using a difference-in-differences approach, we take advantage of the fact that the minimum wage for people aged 16 and 17 years old, which was approximately two thirds the level of the standard minimum wage, was raised to reach full convergence with the latter in a period of three years (from 1995 to 1998). The empirical analysis suggests that this policy intervention depressed the employment levels of the affected group, raised unemployment among them and decreased the probability of remaining in formal education.

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File URL: http://mpra.ub.uni-muenchen.de/33488/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 33488.

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Date of creation: Sep 2011
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Handle: RePEc:pra:mprapa:33488

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Keywords: minimum wage; Spain; difference-in-differences; employment;

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  1. Pereira, Sonia C., 2003. "The impact of minimum wages on youth employment in Portugal," European Economic Review, Elsevier, Elsevier, vol. 47(2), pages 229-244, April.
  2. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, Elsevier, vol. 80(1), pages 123-129, July.
  3. Hyslop, Dean & Stillman, Steven, 2007. "Youth minimum wage reform and the labour market in New Zealand," Labour Economics, Elsevier, Elsevier, vol. 14(2), pages 201-230, April.
  4. Glenda Quintini & Sébastien Martin, 2006. "Starting Well or Losing their Way?: The Position of Youth in the Labour Market in OECD Countries," OECD Social, Employment and Migration Working Papers 39, OECD Publishing.
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