Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/102318
Authors: 
Blumkin, Tomer
Danziger, Leif
Year of Publication: 
2014
Series/Report no.: 
IZA Discussion Papers 8418
Abstract: 
This paper provides a novel justification for using a minimum wage to supplement an optimal tax-and-transfer system. We demonstrate that if labor supply decisions are concentrated along the intensive margin and employment is efficiently rationed, a minimum wage can be socially beneficial by serving as a screening device that targets benefits to the deserving poor. We also show that with a minimum wage in place, a negative marginal tax rate may not be optimal.
Subjects: 
deserving poor
minimum wage
redistribution
efficient rationing
negative marginal tax rate
JEL: 
D6
H2
H5
Document Type: 
Working Paper

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