Friday 17 December 2010

We're an outlier

I'd noted that youth unemployment during the current recession, relative to adult unemployment in prior recessions, seemed really high. I'd argued that it looked likely due to the elimination of the differential youth minimum wage.

Matt Nolan points me to this piece by The Economist showing that New Zealand's current youth unemployment rates are an outlier relative to other countries as well.

The farther north a country is, measured on the perpendicular from the "four times as high" line, the worse youth unemployment is relative to adult. It looks like only Sweden and Luxembourg have worse youth unemployment outcomes relative to adult rates.

It would be awfully interesting if anybody had compiled a dataset of OECD countries' youth minimum wage policies. The multiple's correlate with the ratio of youth to adult minimum wage, coupled perhaps with some measure of the bindingness of the minimum wage, would be worth investigating.

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