Impact of the minimum wage on youth unemployment in Ecuador between 2010 and 2023
Keywords:
Youth unemployment, Minimum wage, Wage policies, EmployabilityAbstract
Youth unemployment in Ecuador has been a persistent and complex issue, influenced by factors such as the minimum wage—a key element of the country's economic policy. This study analyzes the relationship between the minimum wage and youth unemployment in Ecuador from 2010 to 2023, aiming to assess whether minimum wage increases have contributed to lowering the youth unemployment rate. Using an econometric approach and a simple linear regression model, a moderate inverse relationship between the two variables was identified. The results suggest that as the minimum wage rises, the youth unemployment rate tends to fall; however, the coefficient of determination (R²) of 0.2025 indicates that this factor explains only a portion of the variability in youth unemployment. Other elements—such as informality, education, and youth employment policies—are also key determinants. A comparison with the general unemployment rate reveals that young people face greater challenges in the labor market. In conclusion, while the minimum wage has a moderate impact on youth unemployment, it is not sufficient on its own to resolve the issue. The study highlights the need for complementary policies, such as training programs and employment formalization, to address the structural causes of youth unemployment in Ecuador.
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