Do Lower Minimum Wages for Young Workers Raise Their Employment? Evidence from a Danish Discontinuity | Zendy

Claus Thustrup Kreiner | Zendy; Daniel Reck | Zendy; Peer Ebbesen Skov | Zendy

AI Assistant Blog Pricing

Home ZAIA Blog

Open Access

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

Author(s) -

Claus Thustrup Kreiner,

Daniel Reck,

Peer Ebbesen Skov

Publication year - 2019

Publication title -

the review of economics and statistics

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 8.999

H-Index - 165

eISSN - 1530-9142

pISSN - 0034-6535

DOI - 10.1162/rest_a_00825

Subject(s) - danish , payroll , regression discontinuity design , discontinuity (linguistics) , minimum wage , economics , wage , payment , classification of discontinuities , labour economics , demographic economics , population , demography , mathematics , statistics , mathematical analysis , philosophy , linguistics , accounting , finance , sociology

We estimate the impact of youth minimum wages on youth employment by exploiting a large discontinuity in Danish minimum wage rules at age 18, using monthly payroll records for the Danish population. The hourly wage jumps by 40% at the discontinuity. Employment falls by 33%, and total input of hours decreases by 45%, leaving the aggregate wage payment almost unchanged. We show theoretically how the discontinuity may be exploited to evaluate policy changes. The relevant elasticity for evaluating the effect on youth employment of changes in their minimum wage is in the range 0.6 to 1.1.

The content you want is available to Zendy users.

Already have an account? Click here to sign in.

Having issues? You can contact us here

Accelerating Research