Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/64224
Authors: 
Slonimczyk, Fabián
Skott, Peter
Year of Publication: 
2012
Series/Report no.: 
Working Paper, University of Massachusetts, Department of Economics 2012-05
Abstract: 
This paper analyzes the effects of the minimum wage on wage inequality, relative employment and over-education. 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

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