Optimal Minimum Wage in the Classic Labor Supply-and-Demand Paradigm

Rajeev Dehejia, Bjørn N. Jørgensen, Raphael C. Thomadsen*

*Corresponding author af dette arbejde

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Abstrakt

This article demonstrates that minimum wage laws need not induce unemployment even under the classic labor supply-and-demand paradigm. As a result, minimum wage laws can be welfare-enhancing under the basic labor supply and demand model, suggesting the presence of an optimal minimum wage. We discuss conditions under which the optimal minimum wage level is the subsistence wage level. As a consequence, minimum wages should vary across states or countries with the local subsistence levels
OriginalsprogEngelsk
TidsskriftJournal of Poverty
Vol/bind12
Udgave nummer4
Sider (fra-til)481-495
Antal sider15
ISSN1087-5549
DOI
StatusUdgivet - 2008
Udgivet eksterntJa

Emneord

  • Minimum wage
  • Unemployment
  • Wage regulation

Citationsformater