Layoff taxes and minimum wage: Two complementary public policies
AbstractIn a matching model in which the job destruction rate and the output are endogenous, we show that the presence of a binding minimum wage prompts firms to choose too risky jobs. Introducing layoff taxes therefore reduces unemployment and improves market efficiency.
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Bibliographic InfoArticle provided by Elsevier in its journal Economics Letters.
Volume (Year): 107 (2010)
Issue (Month): 1 (April)
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Web page: http://www.elsevier.com/locate/ecolet
Employment protection Layoff taxes Minimum wage Equilibrium unemployment Market efficiency;
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