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

John Addison and Orgul Ozturk

No 5162, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: 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.

Keywords: participation; cross-section time-series data; employment; unemployment; prime-age females; wage fixing machinery; minimum wages; OECD countries; labor market flexibility; labor market institutions and policies (search for similar items in EconPapers)
JEL-codes: J20 J38 J48 J58 J88 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2010-09
New Economics Papers: this item is included in nep-lab and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Published - published in: Industrial and Labor Relations Review, 2012, 65 (4), 779-809

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