Minimum wages and youth employment: Evidence from the Finnish retail trade sector

Petri Böckerman () and Roope Uusitalo

MPRA Paper from University Library of Munich, Germany

Abstract: Following an agreement between the trade unions and the employer organisations, Finnish employers could pay less than the existing minimum wage for young workers between 1993 and 1995. We examine the effects of these minimum wage exceptions by comparing the changes in wages and employment of the groups whose minimum wages were reduced with simultaneous changes among slightly older workers for whom the minimum wage regulation was still binding. Our analysis is based on the payroll record data and minimum wage agreements from the retail trade sector over the period 1990-2005. We discover that average wages in the eligible group declined only modestly despite the fact that the excess supply of labour during high unemployment should make it relatively easy to attract workers even with low wages. The minimum wage exceptions had no positive effects on employment.

Keywords: Labour demand; employment; minimum wages; trade unions (search for similar items in EconPapers)
JEL-codes: J31 J51 (search for similar items in EconPapers)
Date: 2007-12-05
New Economics Papers: this item is included in nep-eec and nep-lab
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Minimum Wages and Youth Employment: Evidence from the Finnish Retail Trade Sector (2009)
Working Paper: Minimum wages and youth employment: Evidence from the Finnish retail trade sector (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:6113

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