Working Paper: CEPR ID: DP2239
Authors: Guy Laroque; Bernard Salani
Abstract: The purpose of this paper is to study the causes of unemployment empirically, using individual data and an approach which refines that of Meyer and Wise. Using the French 1997 Labour Survey data, we decompose non-employment of married women into three components: voluntary, classical (due to the minimum wage) and 'other' (a residual category). We find that the minimum wage explains close to 15% of non-employment for these women and that the disincentive effects of some welfare policy measures may be large. Our approach also allows us to evaluate various labour and welfare policy experiments in their effects on participation and employment.
Keywords: minimum wage; female labour supply
JEL Codes: J20; J40
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| minimum wage (J38) | classical nonemployment (J64) |
| welfare policies (I38) | nonemployment (J68) |
| minimum wage + welfare policies (J38) | nonemployment (J68) |
| minimum wage (J38) | nonemployment (J68) |
| welfare system (I38) | poverty trap (I32) |