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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/52459
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| Title: | | Spillover effects of minimum wages: Theory and experimental evidence  |
| Authors: | | Dittrich, Marcus Knabe, Andreas Leipold, Kristina |
| Issue Date: | | 2011 |
| Series/Report no.: | | CESifo working paper: Labour Markets 3576 |
| Abstract: | | We study the spillover effects of minimum wages in a laboratory experiment. In a bilateral firm-worker bargaining setting, we find that the introduction of a minimum wage exerts upward pressure on wages even if the minimum wage is too low to be a binding restriction. Furthermore, raising the minimum wage to a binding level increases the bargained wage above the new minimum wage level. While the Nash solution cannot explain the existence of spillover effects, the Kalai-Smorodinsky solution yields results that are qualitatively more in line with our experimental findings. |
| Subjects: | | minimum wage bargaining Kalai-Smorodinsky solution labor market experiments |
| JEL: | | C71 C91 J38 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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