Employment Effects of Minimum Wages in Inflexible Labor Markets Report as inadecuate




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Abstract

This paper structurally models and estimates the employment effects of minimum wages in inflexible labormarkets with fixed employment costs. When there are fixed costs associated with employment, minimumwage regulation not only results in a reduction in employment among low productivity workers but alsoshifts the distribution of hours for the available jobs in the market, resulting in scarcity of part-time jobs.Thus, for sufficiently high employment costs, a minimum wage makes it less likely for -marginal- workersto enter and stay in the labor market and has important employment effects. I estimate the model usingsurvey data from Turkey. I find significant reduction in employment due to the loss of part time jobs causedby the national minimum wage policy in this highly inflexible labor market.



Item Type: MPRA Paper -

Original Title: Employment Effects of Minimum Wages in Inflexible Labor Markets-

Language: English-

Subjects: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal EconomyJ - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor CostsJ - Labor and Demographic Economics > J2 - Demand and Supply of Labor-





Author: Ozturk, Orgul

Source: https://mpra.ub.uni-muenchen.de/8016/



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