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Minimum Wage and Capital Taxes

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  • Chi-Chur Chao
  • Eden Siu Hung Yu

Abstract

Using a general equilibrium model, this paper examines the employment and welfare effects of minimum wages coupled with capital taxes in a small open economy. The individual and joint optimal policies for a minimum wage and capital taxes are derived and explained. Specifically, policy reform to introduce a minimum wage while lowering the capital tax can be justified for some economies, notably, Hong Kong.

Suggested Citation

  • Chi-Chur Chao & Eden Siu Hung Yu, 2014. "Minimum Wage and Capital Taxes," Review of Development Economics, Wiley Blackwell, vol. 18(2), pages 195-202, May.
    • Handle: RePEc:bla:rdevec:v:18:y:2014:i:2:p:195-202
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    File URL: http://hdl.handle.net/10.1111/rode.12078
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    References listed on IDEAS

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    1. Udo Kreickemeier, 2017. "Unemployment and the Welfare Effects of Trade Policy," World Scientific Book Chapters, in: International Trade and Labor Markets Welfare, Inequality and Unemployment, chapter 3, pages 73-94, World Scientific Publishing Co. Pte. Ltd..
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