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Effects of collective minimum wages on youth employment in Austria

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Abstract

This paper analyzes the impact of collective minimum wages on youth employment for 14 sectors of the Austrian economy, taking into account the possibility of nonlinearity. We find that when the real index of minimum wage rises above a certain point, negative employment effects for young individuals (aged between 19 and 25 years) can be expected in Austria. In five of seven market sectors the minimum wage lies above the optimal level that maximizes the employment of young workers.

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Notes

  1. For a detailed study of the coverage in Austria, see Bönisch (2008).

  2. Nomenclature statistique des activités économiques dans la Communauté Européenne

  3. We have tested an additional specification in which we seasonally adjust tha data with the two-sided Hodrick-Prescott filter, which produces a slightly smoother curve. The results remain unchanged.

  4. We have tested the specifications also for the age group 15 to 24. Results for this age group turned out to be quite similar to those presented in this paper.

  5. The employment rate is defined as the employment of the 19 to 25 year olds as the fraction of the labor force in this age group.

  6. For the mining and quarrying sector, there are less then ten minimum wages included in the TLI index. Therefore only those are used to calculate the minimum wage.

  7. Only the main specification is reported; other results are available from the authors upon request.

  8. Only the main specification is reported; other results are available from the authors upon request.

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Authors and Affiliations

  1. Agenda Austria, Schottengasse 1/3, 1010, Wien, Austria

    Michael Christl, Monika Köppl-Turyna & Dénes Kucsera

Authors
  1. Michael Christl
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  2. Monika Köppl-Turyna
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  3. Dénes Kucsera
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Corresponding author

Correspondence to Monika Köppl-Turyna.

Appendix

Appendix

See Tables 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21.

Table 9 Description and sources of the variables
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Table 10 Summary statistics
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Table 11 Youth employment in industry, trade and services: 3 months lagged
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Table 12 Youth employment in industry, trade and services: 6 months lagged
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Table 13 Youth employment in industry, trade and services: 12 months lagged
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Table 14 Full sample results for the 12 months lagged TLI index, weighted by the size of the sector
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Table 15 Industry, trade and services results for the 12 months lagged TLI index, weighted by the size of the sector
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Table 16 Industry, trade and services results for the 12 months lagged TLI index with interactions, weighted by the size of the sector
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Table 17 Main specification using quarterly data: 1 quartal lagged
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Table 18 Main specification using quarterly data: 2 quartals lagged
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Table 19 Main specification using quarterly data: 3 quartals lagged
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Table 20 Full sample estimations with cubic spline, 3-, 6- and 12-months lagged
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Table 21 Full sample GMM estimations, 3-, 6- and 12-months lagged
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Christl, M., Köppl-Turyna, M. & Kucsera, D. Effects of collective minimum wages on youth employment in Austria. Empirica 44, 781–805 (2017). https://doi.org/10.1007/s10663-016-9341-7

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  • DOI: https://doi.org/10.1007/s10663-016-9341-7

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