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Title:Employment and distribution effects of the minimum wage PDF Logo
Authors:Slonimczyk, Fabian
Skott, Peter
Issue Date:2010
Series/Report no.:Working Paper, University of Massachusetts, Department of Economics 2010-03
Abstract:Using an efficiency wage model we show that over-education can be generated endogenously and that an increase in the minimum wage can raise both total and low-skill employment, and produce a fall in inequality. Evidence from the US suggests that these theoretical results are empirically relevant. The over-education rate has been increasing and our regression analysis suggests that the decrease in the minimum wage may have led to a deterioration of the employment and relative wage of low-skill workers.
Subjects:minimum wage
earnings inequality
monopsony
efficiency wage
over-education
JEL:J31
J41
J42
Document Type:Working Paper
Appears in Collections:Working Papers, Department of Economics, University of Massachusetts

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