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

32 Pages Posted: 7 Sep 2010

See all articles by John T. Addison

John T. Addison

University of South Carolina - Moore School of Business - Department of Economics; IZA Institute of Labor Economics

Orgul D. Ozturk

University of South Carolina - Moore School of Business - Department of Economics

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: minimum wages, wage fixing machinery, prime-age females, employment, unemployment, participation, cross-section time-series data, OECD countries, labor market flexibility, labor market institutions and policies

JEL Classification: J20, J38, J48, J58, J88

Suggested Citation

Addison, John T. and Ozturk, Orgul D., Minimum Wages, Labor Market Institutions, and Female Employment and Unemployment: A Cross-Country Analysis. IZA Discussion Paper No. 5162. Available at SSRN: https://ssrn.com/abstract=1672170

John T. Addison (Contact Author)

University of South Carolina - Moore School of Business - Department of Economics ( email )

The Francis M. Hipp Building
1705 College Street
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HOME PAGE: http://mooreschool.sc.edu/moore/economics/profiles/addison.htm

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Orgul D. Ozturk

University of South Carolina - Moore School of Business - Department of Economics ( email )

The Francis M. Hipp Building
1705 College Street
Columbia, SC 29208
United States

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