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http://hdl.handle.net/10419/20831
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| Title: | | Getting It Right: Employment Subsidy or Minimum Wage?  |
| Authors: | | Strobl, Eric Walsh, Frank A. |
| Issue Date: | | 2003 |
| Series/Report no.: | | IZA Discussion paper series 662 |
| Abstract: | | In monopsony models of the labour market either a minimum wage or an employment subsidy financed by a lump sum tax on profits can achieve the efficient level of employment and output. Incorporating working conditions into a monopsony model where higher wages raise firm labour supply, but less attractive working conditions reduce it, changes these policy implications. Specifically, a minimum wage policy could, in contrast to an employment subsidy, cause working conditions to deteriorate and welfare to fall. Empirical evidence from the Republic of Trinidad and Tobago shows that a minimum wage may indeed cause working conditions to worsen. |
| Subjects: | | minimum wage working conditions monopsony models |
| JEL: | | J2 J3 |
| Document Type: | | Working Paper |
| Appears in Collections: | | IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)
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