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Minimum Wages, Market Inflexibilities, and Female Employment in Select OECD Countries

Ozturk, orgul (2006): Minimum Wages, Market Inflexibilities, and Female Employment in Select OECD Countries.

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Abstract

Using international and intertemporal variations in minimum wages, employment protection laws, minimum wage regulations and female work behavior within the OECD, empirical analysis provide evidence that higher minimum wages are associated with lower female labor force participation and employment. This association is more significant in countries with more stringent employment protection laws, lower female tertiary educational enrollment and higher fertility. In addition to the extensive margin analysis, it is shown that minimum wage levels are positively correlated with the ratio of part-time workers. That is, minimum wages are associated with not only lower participation and employment rates among women but also with higher marginalization of female work. This association is stronger in countries with more inflexible labor markets and less active labor market policies. Moreover, existence of a subminimum wage for youths implies further reduction of employment while increasing part-time job incidence for females, when the minimum wage increases.

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