Nanos, P. orcid.org/0000-0002-8936-4542 (2023) Minimum wage spillover effects and social welfare in a model of stochastic job matching. Journal of Public Economic Theory. ISSN 1097-3923
Abstract
In this paper, I carry out a welfare analysis of the minimum wage in the framework of a Diamond–Mortensen–Pissarides model with stochastic job matching. I explore the role of the minimum wage in a labor market with trading externalities and present the necessary and sufficient condition for a minimum wage hike to be efficiency enhancing. In this context, I characterize minimum wage spillover effects and demonstrate that there is a direct link between the welfare effects and spillover effects of a minimum wage. This theoretical finding suggests that the welfare impact of minimum wage changes can be inferred from the empirical observation of spillover effects on the wage distribution.
Metadata
Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2023 The Authors. Journal of Public Economic Theory published by Wiley Periodicals LLC. This is an open access article under the terms of the Creative Commons Attribution License, (http://creativecommons.org/licenses/by/4.0/) which permits use, distribution and reproduction in any medium, provided the original work is properly cited. |
Keywords: | minimum wage; wage distribution; social welfare; policy evaluation |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Department of Economics (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 24 Jan 2023 13:50 |
Last Modified: | 06 Feb 2023 16:32 |
Status: | Published online |
Publisher: | Wiley |
Refereed: | Yes |
Identification Number: | https://doi.org/10.1111/jpet.12636 |