Webex-seminar: The Young Bunch: The Impact of Youth Minimum Wages on Youth Labor Market Outcomes

We estimate the effects of an increase in the minimum wage for 20- to 22-year-olds in the Netherlands on their employment and earnings, using a difference-in-differences approach with detailed administrative data. We find that the increase did not have a negative effect on the number of jobs and even somewhat increased hours worked, and hence raised overall earnings for all three age-groups. Further, the minimum wage increase has substantial spillover effects, accounting for more than 75% of the average wage increase experienced by workers. Lastly, while employment grows in fixed-term and temporary help agency contracts, we do not find evidence of declines in employment in other types of work arrangements, nor of labor-labor substitution. Importantly, labor market outcomes evolve most favorably for fulltime workers who are not enrolled in education and thus less likely to be transient occupants of minimum-wage jobs.