Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/189155 
Year of Publication: 
1991
Series/Report no.: 
Queen's Economics Department Working Paper No. 831
Publisher: 
Queen's University, Department of Economics, Kingston (Ontario)
Abstract: 
A model is constructed in which, given the inability of implicit contracts to be self-enforcing, a minimum wage policy combined with unemployment insurance can be welfare-improving. Unemployment insurance can be decentralized to the private sector if the government can commit to a minimum wage. However, if it cannot , a government which acts in the interest of the workers will have an incentive to increase the minimum wage to exploit private insurers. The full commitment optimum can be achieved by publicly provided unemployment insurance.
Document Type: 
Working Paper

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