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

• Main Author: Raihan, Ramli
• Format: Thesis
• Language: English; English
• 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; https://etd.uum.edu.my/5218/

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