The Correlation Between Minimum Wage and Youth Unemployment: A Cross Country Analysis
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In this paper, we are exploring the correlation of minimum wage with youth unemployment across 25 OECD countries. We chose to focus on youth unemployment as opposed to overall unemployment for multiple reasons. One reason is that the effects of economic changes are often exaggerated in the youth labor market because of the lower skillset and experience that youth tend to have, making them more easily disposable than other workers. We developed two models. The first is a simple linear regression model; however, because of low statistical significance in this model, we decided to further explore the correlation using a multiple linear regression model. With this model, we found the relationship between the minimum wage and youth unemployment is positive and has a coefficient of 0.0176.