Effects of the labor market reforms on adolescent employment in Mexico

This article analyzes the effect of two labor reforms on youth employment: the single minimum wage zone consolidation and the minimum age to work increased from 14 to 15 years old. Both reforms took place in Mexico in the same year. We examine these changes as a quasi-natural experiment to compare cities that change their minimum wage zone with those that do not. We segregate workers by age into two adolescent groups, the underaged and the legal age to work. The differences-in-differences analysis showed that a higher minimum wage increased employment only for adolescents of legal age to work, while the effect on adolescents underaged was null. The results were not robust when we accounted for a more extended period in a panel data analysis, as there were no effects on employment in any group.