Effects of collective minimum wages on youth employment in Austria

This paper analyses the impact of collective minimum wages on youth employment for 14 sectors of the Austrian economy, taking into account the possibility of non-linearity. We find that when the real index of minimum wage rises above a certain point, negative employment effects for young individuals (aged between 19 and 25 years) can be expected in Austria. In five of seven market sectors the minimum wage lies above the optimal level that maximises the employment of young workers.