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The Impact of Age-Specific Minimum Wages on Youth Employment and Education: A Regression Discontinuity Analysis

Author

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  • Meltem Dayioglu Tayfur

    (Middle East Technical University)

  • Muserref Kucukbayrak

    (Central Bank of the Republic of Turkey)

  • Semih Tumen

    (TED University)

Abstract

We exploit the age-specific minimum wage rule—which sets a lower minimum wage for workers of age 15 than that for workers of age 16 and above—to estimate its effects on youth employment and education in Turkey. Using a regression discontinuity approach, we find that youth minimum wage policy substantially reduced employment probabilities of young males. In terms of magnitudes, the employment probability declined by 2.5-3.1 percentage points at 16-year-old age cut-off. Due to the policy, probability of unemployment increased around 2 percentage points. Our findings also suggest that the policy change increased high school enrollment among young males. We conjecture that the effects of the policy have mostly been driven by the demand-side forces rather than the supply side

Suggested Citation

  • Meltem Dayioglu Tayfur & Muserref Kucukbayrak & Semih Tumen, 2020. "The Impact of Age-Specific Minimum Wages on Youth Employment and Education: A Regression Discontinuity Analysis," Working Papers 1431, Economic Research Forum, revised 20 Dec 2020.
    • Handle: RePEc:erg:wpaper:1431
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    More about this item

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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