ERF 26th Annual Conference

The Impact of Age-specific Minimum Wages on Youth Employment and Education: A Regression Discontinuity Analysis

No.

ERF26_112

Publisher

ERF

Date

September, 2020

Topic

J3. Wages, Compensation, and Labor Costs

J2. Demand and Supply of Labor

We exploit the age-specific minimum wage rule|which sets a lower minimum wage for workers of age 15 than that for workers of age 16 and above|to estimate its effects on youth employment and education in Turkey. Using a regression discontinuity approach, we find that youth minimum wage policy substantially reduced employment probabilities of young males. In terms of magnitudes, the employment probability declined by 2-4 percentage points for salaried workers and 3-5 percentage points for all at 16-year-old age cut-o . Due to the policy, probability of unemployment increased around 2 percentage points. Our findings also suggest that the policy change increased high school enrollment among young males. We conjecture that the effects of the policy have mostly been driven by the demand-side forces rather than the supply side.
The Impact of Age-specific Minimum Wages on Youth Employment and Education: A Regression Discontinuity Analysis

Research Fellows

Meltem Dayioglu Tayfur

Professor, Department of Economics, Middle East Technical...

The Impact of Age-specific Minimum Wages on Youth Employment and Education: A Regression Discontinuity Analysis

Research Associates

Müşerref Küçükbayrak

Economist, Structural Economic Research Department, Central Bank...

The Impact of Age-specific Minimum Wages on Youth Employment and Education: A Regression Discontinuity Analysis

Research Fellows

Semih Tumen

Professor of Economics, TED University, Turkey