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

Abstract

The authors investigate the employment consequences of minimum wage regulation for women in 16 OECD countries during 1970 to 2008. The treatment follows that of Neumark and Wascher's (2004) cross-country study using panel methods to estimate minimum wage effects among teenagers and young adults, although they focus on prime-age females—a group often neglected in the minimum wage literature. Moreover, their analysis covers a longer time interval and deploys time-varying policy and institutional regressors. They report average effects consistent with minimum wages causing material employment losses among the target group and, less conclusively, elevated joblessness as well. Their cross-country findings agree with Neumark and Wascher on the role of some individual labor market institutions and policies, but the authors do not observe the same patterns in the institutional data: specifically, prime-age females do not exhibit stronger employment losses in countries with the least regulated markets.