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Title:The ambiguous effect of minimum wages on workers and total hours PDF Logo
Authors:Strobl, Eric
Walsh, Frank A.
Issue Date:2008
Series/Report no.:IZA Discussion Papers 3643
Abstract:We model a competitive labour market where firms choose combinations of workers and hours per worker to produce output. If one assumes that the scale of production has no impact on hours per worker, then the change in the number of workers and hours per worker resulting from a minimum wage are inversely related. We demonstrate that total hours worked at the firm may rise for plausible parameter values if there are small fixed costs to hiring workers. Thus, in contrast to the conventional view, we show that the effect of minimum wages on employment is ambiguous.
Subjects:Minimum wages
hours
employment
JEL:J22
Persistent Identifier of the first edition:urn:nbn:de:101:1-20080825208
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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