The implication of minimum wage on employment rate in selected European countries: A panel data study

The role of minimum wage policy continues to be debated and experienced in the literature on international and human resources economies. This paper extends the previous empirical studies on the issues by providing some evidence from panel data studies from period 1999-2008 on working population of...

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Main Author:	Raihan, Ramli
Format:	Thesis
Language:	eng eng
Published:	2013
Subjects:	HB Economic Theory
Online Access:	https://etd.uum.edu.my/5218/1/s811092.pdf https://etd.uum.edu.my/5218/2/s811092_abstract.pdf
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id	my-uum-etd.5218
record_format	uketd_dc
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
advisor	Samsudin, Shamzaeffa
topic	HB Economic Theory
spellingShingle	HB Economic Theory Raihan, Ramli The implication of minimum wage on employment rate in selected European countries: A panel data study
description	The role of minimum wage policy continues to be debated and experienced in the literature on international and human resources economies. This paper extends the previous empirical studies on the issues by providing some evidence from panel data studies from period 1999-2008 on working population of selected countries in Europe. In this study, the determine dependent variable is employment rate and to be tested with various of strong independent variables which represent labor supply and demand sides, together with institutional factor that contains minimum wage, labor participation with each level of educational attainment, labor productivity and strictness of employment protection. The econometric model has been defined by using Pooled Ordinary Least Square, Fixed Effects (FE), Random Effects (RE). In further extend Hausman Test (HT) test is needed to estimates random and fixed effects to check and analyze the impact of minimum wage on employment generally in Europe. The main conclusion of the study may be summarized as follows: i) minimum wage has had a positive impact on employment in Europe of year 1999-2008, ii) the adverse effect on working population are generally goes to labor with very least educational attainment and iii) there is some evidence that a uniform minimum wage may be particularly harmful to employment due other factors such as labor productivity and strictness of employment. Finally this paper draws some alternative policy implications for further studies to focus on the working population in Europe, to ensure the economic stability
format	Thesis
qualification_name	masters
qualification_level	Master's degree
author	Raihan, Ramli
author_facet	Raihan, Ramli
author_sort	Raihan, Ramli
title	The implication of minimum wage on employment rate in selected European countries: A panel data study
title_short	The implication of minimum wage on employment rate in selected European countries: A panel data study
title_full	The implication of minimum wage on employment rate in selected European countries: A panel data study
title_fullStr	The implication of minimum wage on employment rate in selected European countries: A panel data study
title_full_unstemmed	The implication of minimum wage on employment rate in selected European countries: A panel data study
title_sort	implication of minimum wage on employment rate in selected european countries: a panel data study
granting_institution	Universiti Utara Malaysia
granting_department	Othman Yeop Abdullah Graduate School of Business
publishDate	2013
url	https://etd.uum.edu.my/5218/1/s811092.pdf https://etd.uum.edu.my/5218/2/s811092_abstract.pdf
_version_	1776103674705084416
spelling	my-uum-etd.52182023-02-08T02:32:34Z The implication of minimum wage on employment rate in selected European countries: A panel data study 2013 Raihan, Ramli Samsudin, Shamzaeffa Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HB Economic Theory The role of minimum wage policy continues to be debated and experienced in the literature on international and human resources economies. This paper extends the previous empirical studies on the issues by providing some evidence from panel data studies from period 1999-2008 on working population of selected countries in Europe. In this study, the determine dependent variable is employment rate and to be tested with various of strong independent variables which represent labor supply and demand sides, together with institutional factor that contains minimum wage, labor participation with each level of educational attainment, labor productivity and strictness of employment protection. The econometric model has been defined by using Pooled Ordinary Least Square, Fixed Effects (FE), Random Effects (RE). In further extend Hausman Test (HT) test is needed to estimates random and fixed effects to check and analyze the impact of minimum wage on employment generally in Europe. The main conclusion of the study may be summarized as follows: i) minimum wage has had a positive impact on employment in Europe of year 1999-2008, ii) the adverse effect on working population are generally goes to labor with very least educational attainment and iii) there is some evidence that a uniform minimum wage may be particularly harmful to employment due other factors such as labor productivity and strictness of employment. Finally this paper draws some alternative policy implications for further studies to focus on the working population in Europe, to ensure the economic stability 2013 Thesis https://etd.uum.edu.my/5218/ https://etd.uum.edu.my/5218/1/s811092.pdf text eng public https://etd.uum.edu.my/5218/2/s811092_abstract.pdf text eng public masters masters Universiti Utara Malaysia Beaudry, P., & Dinardo, J. (1991). The Effect of Implicit Contracts on the Movement of Wages Over the Business Cycle: Evidence from Micro Data. The Journal of Political Economy. Volume 99, No. 4, The University of Chicago Press. Brown, C., Gilroy, C., & Kohen, A. (1982). The Effect of the Minimum Wage on Employment and Unemployment. Journal of Economic Literiture. Volume 20, Issue 2, American Economic Association. Comola, M., & Mello Luiz, D. (2010). How does Decentralizes Minimum Wage Setting Affect Employment and Informality? The Case in Indonesia. OECD Economic Department. Cunningham, W., Neumark, D., & Siga L. (2004). The Effects of Minimum Wages in Brazil on the Distribution of Family Incomes: 1996-2001. World Bank Washington D.C. Dickens, R., Machins, S., & Manning, A. (1999). The Effects of Minimum Wage on Employment Theory and Evidence from Britain. Journal Labor Economy. The University Of Chicago. Eurofound (2012). Trends in Jobs Quality in Europe. Luxemborg: Publication Office in European Union. Fields, G. S., (2003). Decent Work and Development Policies. International Labor Review. ILR School, Cornell University. Fields, G. S., & Kanbur, R. (2005). Minimum Wage and Poverty. Cornell University. Harrison, A., & Leaner, E. (1997). Labor Market in Developing Countries: An Agenda for Research. Journal of Labor Economic. The University of Chicago Press. Herr, H., & Kazandziska, M. (2011). Principles of Minimum Wage Policy- Economics, Institutions and Recommendations. Working Paper No.11. Global Labor University. Jeffrey, P. (2010). Economics 314 Coursebook. Macroeconomic Theory. Spring 2011. Jones, P. (1997). The Impact of Minimum Wage Legislation in Developing Countries Where Coverage is Incomplete. Oxford: Institute of Economics and Statistic. Kromann, L., Skaksen, J.R., & Sorensen A. (2008). Automation, Labor Productivity and Employment- A Cross Country Comparison. CEBR, Copenhegen Business School. Lemons, S. (2004). The Effects of the Minimum Wage in Formal and Informal Sectors in Brazil. IZA DP No. 1089, Bonn Germany. Line, E., & Kristin, A. (2012). European Minimum Wage a Nordic Outlook. Faforeport. 2012. Lustig, N.C., & Mc., Leod., D. (1997). Minimum Wages and Poverty in Developing Countries: Some Empirical Evidence. Washington D.C.: Brooking Institution Press. Maloney, W.F (2003). Measuring the Impact of Minimum Wage Policies on the Economy. Working Papers 9800. National Bureau of Economic Research Cambridge. Neumark, D., & Wascher, W. (1999). A Cross- National Analysis of the Effects of Minimum Wages on Youth Employment. NBER Working Papers 7299, National Bureau of Economic Research, Inc. Neumark, D., & Wascher, W. (2007). Minimum Wages and Employment. Discussion Paper No. 2570, IZA, Germany. Ochel, W., & Rohwer, A. (2009). Reduction of Employment Protection in Europe: A Comparative Fuzzy Set Analysis. CESifo Working Paper No. 2828, University of Munich. Riddel, W. C & Song, X. (2011). The Impact of Education on Unemployment Incidence and Re-employment Success: Evidence from U.S Labor Market (2011). Institute for Study Labor (IZA). Riveros, L.A., & Parades, R. (1998). Measuring the Impact of Minimum Wage Policies on the Economy. Working Papers Macroeconomic Adjustment and Growth, The World Bank. Rutkowski, J. (2003). The Minimum Wage: Curse or Cure?. Human Development Economics Europe and Central Asia Region, The World Bank. Saget, C. (2001). Poverty Reduction and Decent Work in Developing Countries: Do Minimum Wages Help?. International Labor Review (Geneva), Vol. 140, No.3. Schulten, T. (2012). Minimum Wage Europe Austerity. ET Al Sbi, Brussels. Tang, H. (2012). Labor Market Institutions, Firm-Specific Skills and Trade Patterns. Journal of International Economics, Elsevier. Tansel, A. (2004). Education and Labor Market Outcomes in Turkey. Department of Economics, Middle East Technical University, Ankara. Veddder, R.K., & Gallaway, L.E (2001). Does Minimum Wage Reduce Poverty. Employment Policies Institute, Ohio University.

The implication of minimum wage on employment rate in selected European countries: A panel data study

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