Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/323260 
Year of Publication: 
2024
Citation: 
[Journal:] Economic Theory [ISSN:] 1432-0479 [Volume:] 79 [Issue:] 3 [Publisher:] Springer [Place:] Berlin, Heidelberg [Year:] 2024 [Pages:] 945-991
Publisher: 
Springer, Berlin, Heidelberg
Abstract: 
We use a microeconomic approach to analyze the effects of minimum wages. Agents are allowed to have different productivities at different principals as well as different costs of working. We obtain several new and interesting effects. Minimum wages could influence the generated surplus when leaving employment unaffected, and destroy jobs that generate relatively high levels of surplus when affecting employment. Furthermore, minimum wages could harm agents even if these stay employed, while principals could benefit from them. We provide a complete characterization of the effects and show that these hold independently of the specific bargaining procedure and information structure.
Subjects: 
Minimum wages
Principal-agent model
Costs of working
Welfare effects
JEL: 
C78
D21
J31
J38
K31
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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