Employment Effects of Minimum Wages in Inflexible Labor Markets

Orgul Ozturk

MPRA Paper from University Library of Munich, Germany

Abstract: This paper structurally models and estimates the employment effects of minimum wages in inflexible labor markets with fixed employment costs. When there are fixed costs associated with employment, minimum wage regulation not only results in a reduction in employment among low productivity workers but also shifts the distribution of hours for the available jobs in the market, resulting in scarcity of part-time jobs. Thus, for sufficiently high employment costs, a minimum wage makes it less likely for "marginal" workers to enter and stay in the labor market and has important employment effects. I estimate the model using survey data from Turkey. I find significant reduction in employment due to the loss of part time jobs caused by the national minimum wage policy in this highly inflexible labor market.

JEL-codes: E2 J2 J3 (search for similar items in EconPapers)
Date: 2006, Revised 2008
New Economics Papers: this item is included in nep-cwa, nep-lab and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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https://mpra.ub.uni-muenchen.de/8016/1/MPRA_paper_8016.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/16233/1/MPRA_paper_16233.pdf revised version (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:8016

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