Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/232734 
Year of Publication: 
2020
Series/Report no.: 
IZA Discussion Papers No. 13982
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We exploit an age-specific minimum wage rule – which sets a lower minimum wage for workers of age 15 than that for workers of age 16 and above in Turkey – and its abolition to estimate the causal effect of a minimum wage increase on youth employment and education. Using a regression discontinuity design in tandem with a difference-in-discontinuities analysis, we find that increasing the minimum wage substantially reduces the employment of young males. In terms of magnitudes, the employment probability declines by 2.5-3.1 percentage points at the 16-year-old age cut-off. Moreover, the probability of unemployment increases approximately 2 percentage points. We also document that the minimum wage hike does not generate a major change in high school enrollment, while the likelihood of transitioning into "neither in employment nor in education and training" (NEET) category notably increases among young males. We argue that the effects of the policy have mostly been driven by the demand-side forces rather than the supply side.
Subjects: 
education
youth employment
age-specific minimum wages
regression discontinuity design
JEL: 
J21
J24
J31
J38
Document Type: 
Working Paper

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