Minimum wages and youth employment: decreasing the wages had no effect on youth employment

This article, “Minimum wages and youth employment: Evidence the Finnish retail trade sector” is proving that in Finland, in the 90s, letting employers the possibility to pay less young people had practically no effect. It has been written by Petri Böckerman for the Labour Institute for Economic Research, and Roope Uusitalo for the Labour Institute for Economic Research and the Institute for Labour Market Policy Evaluation.

Abstract

Following an agreement between the trade unions and the employer organisations,
Finnish employers could pay less than the existing minimum wage for young workers
between 1993 and 1995. We examine the effects of these minimum wage exceptions
by comparing the changes in wages and employment of the groups whose minimum
wages were reduced with simultaneous changes among slightly older workers for
whom the minimum wage regulation was still binding. Our analysis is based on the
payroll record data and minimum wage agreements from the retail trade sector over
the period 1990-2005. We discover that average wages in the eligible group declined
only modestly despite the fact that the excess supply of labour during high
unemployment should make it relatively easy to attract workers even with low wages.
The minimum wage exceptions had no positive effects on employment.

Two decades of structural reform in Denmark: a review

You are a President, or a Prime Minister, you have worries. What if somebody gives you the miracle remedy to get your people rich, among the richest in the world, to put down poverty, to reduce inequalities, with a health insurance for all, and, yes, no inflation, an unemployment at such a low level that the employers ask for a lot more immigrants? So, go to Denmark, or read what Søren Gaard and Mads Kieler from the Danish Ministry of Finance have to say about how Danes did it.

Has the youth labour market deteriorated in recent decades? Evidence from developed countries

This interesting report from Paul Ryan (Arbetsrapport/Institutet för Framtidsstudier; 2007:5, ISSN: 165-120X, ISBN: 978-91-85619-04-7) puts some light on the controversial question of the way young people manage on the labour market in different countries, including the Nordic countries. It is a working paper of the swedish institute for Future Studies in Stockholm