Optimal minimum wage in a competitive economy: An alternative modelling approach

Gorostiaga, Arantza; Rubio-Ramı́rez, Juan Francisco

doi:10.1016/j.econmod.2007.02.004

Cited by 4 publications

(1 citation statement)

References 23 publications

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“…Another strand of the literature has explored the role the minimum wage plays as a redistributive policy. Examples of these are Boadway and Cuff (2001), Gorostiaga and Rubio-Ramírez (2007), or, more recently, Lee and Saez (2012). Either explicitly, through government preferences, or implicitly, through curvature in individuals' utility, these papers find that minimum wages can be welfare improving through reduced inequality.…”

Section: Literature Reviewmentioning

confidence: 99%

Optimal Design and Quantitative Evaluation of the Minimum Wage

Pujolás

Mahone

2017

SSRN Journal

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We study a labor market where firms have private information about their ex-ante heterogeneous productivities and search is random. In this environment, a binding minimum wage can be efficiency-enhancing-we show that setting it using a version of the Vickery-Clarke-Groves mechanism delivers full efficiency. In a dynamic, stochastic version of the model calibrated to the Routine Manual labor market in the U.S., our proposed mechanism generates sizeable welfare gains. The resulting minimum wage is procyclical, dampening the response of unemployment to aggregate shocks.

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Section: Literature Reviewmentioning

confidence: 99%

Optimal Design and Quantitative Evaluation of the Minimum Wage

Pujolás

Mahone

2017

SSRN Journal

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Estimating the impact of minimum wages on poverty across ethnic groups in Malaysia

et al. 2016

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Employment effects of introducing a minimum wage: The case of Germany

Holtemöller

Pohle

2020

Economic Modelling

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The responsibility for discussion papers lies solely with the individual authors. The views expressed herein do not necessarily represent those of IWH. The papers represent preliminary work and are circulated to encourage discussion with the authors. Citation of the discussion papers should account for their provisional character; a revised version may be available directly from the authors. Comments and suggestions on the methods and results presented are welcome.

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Optimal minimum wage in a competitive economy: An alternative modelling approach

Cited by 4 publications

References 23 publications

Optimal Design and Quantitative Evaluation of the Minimum Wage

Optimal Design and Quantitative Evaluation of the Minimum Wage

Estimating the impact of minimum wages on poverty across ethnic groups in Malaysia

Employment effects of introducing a minimum wage: The case of Germany

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