Meltem Dayioglu, Müşerref Küçükbayrak and Semih Tumen
Using a regression discontinuity design in tandem with a difference-in-discontinuities analysis, the study finds that increasing the minimum wage reduces the employment…
Abstract
Purpose
Using a regression discontinuity design in tandem with a difference-in-discontinuities analysis, the study finds that increasing the minimum wage reduces the employment probability of young males by 2.5–3.1 percentage points.
Design/methodology/approach
The authors exploit an age-specific minimum wage rule – which sets a lower minimum wage for workers of age 15 than the adult minimum wage paid to workers of age 16 and above – and its abolition to estimate the causal effect of a minimum wage increase on youth employment and education in Turkey.
Findings
The authors also document that, initially, the minimum wage increase does not lead to a major change in high school enrollment, while the likelihood of transitioning into “neither in employment nor in education and training” (NEET) category notably increases. However, in the medium term, the NEET effect is transitory; school enrollment increases over time and absorbs the negative employment effect.
Originality/value
The authors argue that policy effects have mostly been driven by demand-side forces rather than the supply side.
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The purpose of this paper is to estimate the causal effect of vocational high school (VHS) education on employment likelihood relative to general high school (GHS) education in…
Abstract
Purpose
The purpose of this paper is to estimate the causal effect of vocational high school (VHS) education on employment likelihood relative to general high school (GHS) education in Turkey using Census data.
Design/methodology/approach
To address non-random selection into high school types, the authors collect construction dates of the VHSs at the town level and use various measures of VHS availability in the town by the age of 13 as instrumental variables.
Findings
The first-stage estimates suggest that the availability of VHS does not affect the overall high school graduation rates, but generates a substitution from GHS to VHS. The OLS estimates yield the result that individuals with a VHS degree are around 5 percentage points more likely to be employed compared to those with a GHS degree. When the authors use measures of VHS availability as instruments, they still find positive and statistically significant effect of VHS degree on employment likelihood relative to GHS degree. However, once they include town-level controls or town fixed effects, IV estimates get much smaller and become statistically insignificant.
Originality/value
The authorsconclude that, although VHS construction generates a substitution from GHS to VHS education, this substitution is not transformed into increased employment rates in a statistically significant way.
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Semih Tumen and Tugba Zeydanli
The purpose of this paper is to test empirically whether there exist spillover externalities in job satisfaction, i.e., to test whether individual-level job satisfaction is…
Abstract
Purpose
The purpose of this paper is to test empirically whether there exist spillover externalities in job satisfaction, i.e., to test whether individual-level job satisfaction is affected by the aggregate job satisfaction level in a certain labor market environment.
Design/methodology/approach
The authors use a linear-in-means model of social interactions in the empirical analysis. The authors develop an original strategy, motivated by the hierarchical models of social processes, to identify the parameters of interest. BHPS and WERS datasets are used to perform the estimations both at the establishment and local labor market levels.
Findings
The authors find that one standard deviation increase in aggregate job satisfaction leads to a 0.42 standard deviation increase in individual-level job satisfaction at the workplace level and a 0.15 standard deviation increase in individual-level job satisfaction at the local labor market level. In other words, the authors report that statistically significant job satisfaction spillovers exist both at the establishment level and local labor market level; and, the former being approximately three times larger than the latter.
Originality/value
First, this is the first paper in the literature estimating spillover effects in job satisfaction. Second, the authors show that the degree of these spillover externalities may change at different aggregation levels. Finally, motivated by the hierarchical models of social processes, the author develop an original econometric identification strategy.