Do Lower Minimum Wages for Younger Workers Raise Their Employment? Evidence from a Danish Discontinuity

Kreiner, Claus Thustrup; Reck, Daniel; Skov, Peer Ebbesen

doi:10.2139/ssrn.3255446

“…Looking at the 40 percent rise in Danish minimum wages when workers turn 18 and become eligible for the adult rate (which is set at a level comparable to a $15 minimum in California) and using a regression discontinuity design and administrative data, Kreiner, Reck, and Skov (2020) document a 33 percent fall in the employment rate and a 45 percent fall in hours. The size of this effect could represent the high elasticity of substitution between workers around their 18th birthday.…”

Section: Other Countries Other Countriesmentioning

confidence: 99%

The Elusive Employment Effect of the Minimum Wage

Manning

¹

2021

Journal of Economic Perspectives

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It is hard to find a negative effect on the employment effect of rises in the minimum wage: the elusive employment effect. It is much easier to find an impact on wages. This paper argues the elusive employment effect is unlikely to be solved by better data, methodology, or specification. The reasons for the elusive employment effect are the factors contributing to why the link between higher minimum wages and higher labor costs are weaker than one might think and because imperfect competition is pervasive in the labor market.

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“…It should be borne in mind that an unjustified increase in the minimum wage based solely on political will, rather than real economic preconditions, can have negative consequences for the flexibility of employment. If the minimum wage is high, companies do not want to hire workers with little experience, low-skilled labor is displaced and young people and other socially vulnerable groups are discriminated against [25][26][27][28]. Initiatives to unjustifiably increase the minimum wage may have a negative impact on formal employment in relatively low average wages, as well as on formal youth and rural employment [29].…”

Section: Table 6 (Ending)mentioning

confidence: 99%

Informal employment in Ukraine and formation of institutional conditions of its minimization

Yuryk¹

2020

Economy and forecasting

0

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The article presents the results of the study on the structure and scale of spread of informal employment in Ukrainian labor market. Based on the analysis of the received estimates, the author makes a social and economic profile of the average worker involved in informal labor relations. The peculiarity of the study is that all estimates are considered separately for hired labor and self-employment, which allows to identify the internal heterogeneity of the structure of informal employment in Ukraine. According to the results of the econometric modeling, the main socio-economic, demographic, settlement, professional and sectoral factors that determine the involvement of the individual in informal employment in Ukraine are identified. Described the basics of legal regulation of labor relations as a formal institution influencing the dynamics of informal employment. Established the relationship between the level of flexibility in the regulation of the labor market in the country and the extent of informal employment among its population. It has been shown that in economies with flexible regulation, as a rule, informal employment is lower. Based on assessments and analysis of the flexibility of labor market regulation in Ukraine by such components as hiring, working hours and staff reductions (rules and costs), bottlenecks in the national legislation have been identified that can cause increased informal employment, which in turn helped determine the main institutional conditions for its minimization.

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“…Слід пам'ятати, що необґрунтоване підвищення мінімальної заробітної плати на основі виключно політичної волі, а не реальних економічних передумов, може мати негативні наслідки на гнучкість найму працівників. Якщо мінімальна заробітна плата висока, то підприємства не хочуть наймати працівників з малим досвідом роботи, із зайнятості витісняється низькокваліфікована робоча сила, зазнає дискримінації молодь та інші соціально вразливі групи [25][26][27][28]. Ініціативи необґрунтованого підвищення мінімальної заробітної плати можуть негативно відобразитися на офіційній зайнятості в галузях з відносно низькою середньою заробітною платою, а також на формальній зайнятості молоді та у сільській місцевості [29].…”

Section: ключові слова: неформальна зайнятість наймані працівники сам...unclassified

Informal employment in Ukraine and formation of institutional conditions of its minimization

Yuryk¹

2020

Ekon. prognozuvannâ

0

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The article presents the results of the study on the structure and scale of spread of informal employment in Ukrainian labor market. Based on the analysis of the received estimates, the author makes a social and economic profile of the average worker involved in informal labor relations. The peculiarity of the study is that all estimates are considered separately for hired labor and self-employment, which allows to identify the internal heterogeneity of the structure of informal employment in Ukraine. According to the results of the econometric modeling, the main socio-economic, demographic, settlement, professional and sectoral factors that determine the involvement of the individual in informal employment in Ukraine are identified. Described the basics of legal regulation of labor relations as a formal institution influencing the dynamics of informal employment. Established the relationship between the level of flexibility in the regulation of the labor market in the country and the extent of informal employment among its population. It has been shown that in economies with flexible regulation, as a rule, informal employment is lower. Based on assessments and analysis of the flexibility of labor market regulation in Ukraine by such components as hiring, working hours and staff reductions (rules and costs), bottlenecks in the national legislation have been identified that can cause increased informal employment, which in turn helped determine the main institutional conditions for its minimization.

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Do Lower Minimum Wages for Younger Workers Raise Their Employment? Evidence from a Danish Discontinuity

Cited by 5 publications

References 41 publications

The Elusive Employment Effect of the Minimum Wage

The Elusive Employment Effect of the Minimum Wage

Informal employment in Ukraine and formation of institutional conditions of its minimization

Informal employment in Ukraine and formation of institutional conditions of its minimization

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