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Minimum Wages, Labor Market Institutions, and Female Employment and Unemployment: A Cross-Country Analysis

  • Addison, John T.

    ()

    (University of South Carolina)

  • Ozturk, Orgul Demet

    ()

    (University of South Carolina)

This paper estimates the effect of minimum wage regulation in 16 OECD countries, 1970-2008. Our treatment is motivated by Neumark and Wascher's (2004) seminal cross-country study using panel methods to estimate minimum wage effects among teenagers and young adults. Apart from the longer time interval examined here, a major departure of the present study is the focus on prime-age females, a group typically neglected in the component minimum wage literature. Another is our deployment of time-varying policy and institutional regressors. Yet another is our examination of unemployment and participation outcomes in addition to employment effects. We report strong evidence of adverse employment effects among adult females and lower participation, even if the unemployment effects are muted. Although we report some similar findings to Neumark and Wascher as to the role of labor market institutions and policies, we do not observe the same patterns in the institutional data; in particular, we can reject for our target group their finding of stronger disemployment effects in countries with the least regulated markets.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5162.

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Length: 32 pages
Date of creation: Sep 2010
Date of revision:
Publication status: published in: Industrial and Labor Relations Review, 2012, 65 (4), 779-809
Handle: RePEc:iza:izadps:dp5162
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  1. Bernhard Boockmann, 2010. "The Combined Employment Effects of Minimum Wages and Labor Market Regulation – A Meta-analysis," IAW Discussion Papers 65, Institut für Angewandte Wirtschaftsforschung (IAW).
  2. Addison, John T. & Teixeira, Paulino, 2001. "The Economics of Employment Protection," IZA Discussion Papers 381, Institute for the Study of Labor (IZA).
  3. Coe, David T & Snower, Dennis J., 1997. "Policy Complementarities: The Case for Fundamental Labour Market Reform," CEPR Discussion Papers 1585, C.E.P.R. Discussion Papers.
  4. Cahuc, Pierre & Zylberberg, Andre, 1999. "Job Protection, Minimum Wage and Unemployment," IZA Discussion Papers 95, Institute for the Study of Labor (IZA).
  5. Stephen Nickell & Luca Nunziata & Wolfgang Ochel, 2005. "Unemployment in the OECD Since the 1960s. What Do We Know?," Economic Journal, Royal Economic Society, vol. 115(500), pages 1-27, 01.
  6. Blanchard, Olivier & Wolfers, Justin, 2000. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," Economic Journal, Royal Economic Society, vol. 110(462), pages C1-33, March.
  7. John T. Addison & McKinley L. Blackburn & Chad D. Cotti, 2008. "The Effect of Minimum Wages on Labor Market Outcomes: County-Level Estimates from the Restaurant-and-Bar Sector," Working Paper Series 02-08, The Rimini Centre for Economic Analysis, revised Jan 2008.
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