Minimum wages: do they really hurt young people?

Sofía Galán () and Sergio Puente
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Sofía Galán: Banco de España

No 1237, Working Papers from Banco de España

Abstract: We estimate the effects of a significant increase in the minimum wage in Spain between 2004 and 2010 on the individual probability of losing employment, using a large panel of social security records. Our main finding is that older people experienced the largest increase in the probability of losing their job, when compared with other age groups, including young people. The intuition is simple: among the affected (low-productivity) workers, young people are expected to increase their productivity more than older ones, who are in the flat part of their life-cycle productivity curve. Consequently, an employer facing a uniform increase in the minimum wage may find it profitable to retain young employees and to fire older ones

Keywords: Minimum wage; labour demand; firing (search for similar items in EconPapers)
JEL-codes: J23 J38 J63 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2012-10
New Economics Papers: this item is included in nep-bec, nep-eec, nep-eur, nep-lab and nep-lma
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Minimum Wages: Do They Really Hurt Young People? (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:bde:wpaper:1237

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