The impact of the minimum wage on job separations and working hours among young people in Poland

Abstract

The aim of this paper is to investigate the impact of the minimum wage on the risk of job separation and changes in working hours among young people in Poland. To this end, we use longitudinal data from the Labour Force Survey 2003-2011 and a difference-in-differences matching estimator based on the changes in the individual position in the wage distribution. Specifically, we test the impact of the minimum wage by distinguishing between individuals who experienced a transition to the below-the-minimum-wage regime. Our results indicate that when the minimum wage was increased, employment levels, but not the number of hours of worked, declined among young people. We also found that the number of hours worked actually increased among those young people who remained employed after the minimum wage was raised. However, these effects of a hike in the minimum wage were found to have differed across various groups of workers, with men, students, and individuals who were working under a fixed-term contract being most likely to have either lost a job or increased their working longer hours.