IESET.
Hypotheses·labour·minimum_wage_youth_unemployment_tradeoff

In a broad-country panel 1990-2019, higher statutory minimum wages (relative to median earnings) predict higher youth (ages 15-24) unemployment rates, controlling for aggregate demand conditions, education attainment, and labour- market institutions.

The directional claim is that a 10 percentage-point increase in the minimum-to-median wage ratio is associated with at least a 1 percentage-point increase in the youth unemployment rate.

PARTIALengine/runs/minimum_wage_youth_unemployment_tradeoff

PARTIAL — coef=-0.0919, p=0.331 (above α=0.1); direction inconclusive

confidence cueThe result is useful, but not decisive. Treat it as a clue, not a settled conclusion.

policy briefMixed or noisy

In ordinary language

When minimum wages rise high relative to normal local pay, do lower-skill workers keep their jobs, or does hiring fall at the margin?

plain answer

The evidence is suggestive but not decisive. coef=-0.0919, p=0.331 (above α=0.1); direction inconclusive

why it matters

Labor-market rules often help some workers while risking job loss or slower hiring for others. This test looks for that tradeoff in observable employment or unemployment data.

how the test works

It compares 70 country or place units from 1990 to 2019, using a panel fe design, with fixed effects for country and year.

what was measured
What changed
  • Minimum wage to median ratio
  • Minimum wage indicator
What we checked
  • Youth unemployment rate
  • Total unemployment rate
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/minimum_wage_youth_unemployment_tradeoff
1007550250199020052019USAGBRDEUFRAITAESPNLD
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show youth_unemployment_rate across 70 sampled countries over 1990–2019.
The shapes above are stylised — none of the lines are real data.
Placeholder for minimum_wage_youth_unemployment_tradeoff. Published chart will be generated from engine/runs/minimum_wage_youth_unemployment_tradeoff/chart_data.json.

Who has skin in the game — schools predicting on this

2 schools list this hypothesis as a test of their position. The chips below are school-level scoreboard outcomes, not a second hypothesis verdict.

hypothesis verdict vs scoreboard outcome

The banner verdict judges this hypothesis as written. The scoreboard asks whether each school's polarity-corrected prediction was right. Raw status is not a school win: SUPPORTED supports schools that needed SUPPORTED, but refutes schools that needed REFUTED.

Chicago School Monetarismwins if SUPPORTEDpartial/no-callClassical Liberalwins if SUPPORTEDpartial/no-call

Pre-registration

pre-registered
first-spec commit 056ee96 · 2026-05-04T10:44:59Z
run generated · 2026-06-29T17:53:44Z

In a broad-country panel 1990-2019, higher statutory minimum wages (relative to median earnings) predict higher youth (ages 15-24) unemployment rates, controlling for aggregate demand conditions, education attainment, and labour- market institutions. The directional claim is that a 10 percentage-point increase in the minimum-to-median wage ratio is associated with at least a 1 percentage-point increase in the youth unemployment rate.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

SUPPORTED if β1 (min_wage_ratio) is positive and significant at p<0.10 for youth unemployment and larger than for total unemployment. PARTIAL if positive and significant for youth but not total (targeted distortion). REFUTED if β1 is negative and significant at p<0.10. INFORMATIVE: the result should survive excluding USA and France; if not, it is driven by outlier leverage.

formal test & threshold
test:      panel_fe_minimum_wage_youth_unemployment
threshold: β_min_wage (youth unemployment) > 0 at p<=0.10  AND |β_min_wage (youth)| > |β_min_wage (total)|  AND Ex-USA-France robustness retains positive sign.

Method

Template
panel_fe
Fixed effects
country, year
Clustering
country
Sample
70 countries · 1990 – 2019
Evidence type
associational

Two-way FE panel: youth_unemployment = β0 + β1*min_wage_ratio + controls + FE. Robustness: (1) exclude USA (low minimum wage outlier) and France (high minimum wage outlier); (2) use 5-year non-overlapping averages; (3) instrument min_wage ratio with left-party government seat share; (4) separate effects by youth share of labour force; (5) use employment-to- population ratio instead of unemployment rate.

Data

VariableSourceTransform
youth_unemployment_rate
outcome
ilostat:UNE_2EAP_SEX_AGE_RT_Atier 2
level
total_unemployment_rate
outcome
ilostat:UNE_2EAP_SEX_AGE_RT_Atier 2
level
minimum_wage_to_median_ratio
treatment
oecd:MWUSDtier 2
level
minimum_wage_indicator
treatment
constructed:indicator = 1 for countries with statutory minimum wagetier 5
indicator
real_gdp_growth
control
world_bank_wdi:NY.GDP.MKTP.KD.ZGtier 2
level
tertiary_enrollment_rate
control
world_bank_wdi:SE.TER.ENRRtier 2
level
youth_population_share
control
world_bank_wdi:SP.POP.1524.TO.ZStier 2
level
epl_strictness
control
oecd:EPL_OVtier 2
level
trade_openness
control
world_bank_wdi:NE.TRD.GNFS.ZStier 2
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — minimum_wage_youth_unemployment_tradeoff

Verdict: PARTIAL — coef=-0.0919, p=0.331 (above α=0.1); direction inconclusive

Pre-registration

  • Claim: In a broad-country panel 1990-2019, higher statutory minimum wages (relative to median earnings) predict higher youth (ages 15-24) unemployment rates, controlling for aggregate demand conditions, education attainment, and labour- market institutions. The directional claim is that a 10 percentage-point increase in the minimum-to-median wage ratio is associated with at least a 1 percentage-point increase in the youth unemployment rate.
  • Falsification rule: SUPPORTED if β1 (min_wage_ratio) is positive and significant at p<0.10 for youth unemployment and larger than for total unemployment. PARTIAL if positive and significant for youth but not total (targeted distortion). REFUTED if β1 is negative and significant at p<0.10. INFORMATIVE: the result should survive excluding USA and France; if not, it is driven by outlier leverage.
  • Falsification test: panel_fe_minimum_wage_youth_unemployment

Estimate

  • Method: linearmodels.PanelOLS
  • Coefficient (treatment): -0.0919
  • Std error: 0.09432
  • p-value: 0.331
  • Observations: 246, countries: 18
  • Within R²: 0.413
  • Fixed effects: entity=True, time=True
  • Clustering: country

Variables resolved

  • ilostat:UNE_2EAP_SEX_AGE_RT_A → youth_unemployment_rate (outcome, publisher=ilostat, n=10188)
  • ilostat:UNE_2EAP_SEX_AGE_RT_A → total_unemployment_rate (outcome, publisher=ilostat, n=10188)
  • oecd:MWUSD → minimum_wage_to_median_ratio (treatment, publisher=oecd, n=1306)
  • world_bank_wdi:NY.GDP.MKTP.KD.ZG → real_gdp_growth (controls, publisher=world_bank_wdi, n=13897)
  • world_bank_wdi:SE.TER.ENRR → tertiary_enrollment_rate (controls, publisher=world_bank_wdi, n=7217)
  • oecd:EPL_OV → epl_strictness (controls, publisher=oecd, n=1123)
  • world_bank_wdi:NE.TRD.GNFS.ZS → trade_openness (controls, publisher=world_bank_wdi, n=10714)

Variables missing data

  • constructed: indicator = 1 for countries with statutory minimum wage (treatment, name=minimum_wage_indicator) — vintage not on disk
  • world_bank_wdi:SP.POP.1524.TO.ZS (controls, name=youth_population_share) — vintage not on disk

Generated by scripts/run_panel_fe.py at 2026-06-29T17:53:44+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Authored framework. Read the transparency note.