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The Role of the Minimum Wage in the Welfare State: An Appraisal

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  • Juan J. Dolado
  • Florentino Felgueroso
  • Juan F. Jimeno

Abstract

In order to offer a balanced assessment of the role of minimum wages in the Welfare State, seven basic questions need to be answered: (i) Why is the minimum wage a useful redistributive tool?; (ii) How binding are minimum wage floors in different countries?; (iii) To what extent do minimum wages have the adverse consequences that standard analysis predict?; (iv) Are there strong theoretical grounds underlying the revisionist results?; (v) Who supports minimum wages?; (vi) Under which conditions is the minimum wage a better tool than other policy instruments to achieve income redistribution?; and, finally, (vii) What is the overall cross-country time-series evidence regarding the employment effect of the minima? The aim of this paper is to provide an appraisal on the available evidence for each of the above-mentioned issues.

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Paper provided by FEDEA in its series Working Papers with number 2000-12.

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Handle: RePEc:fda:fdaddt:2000-12

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Citations

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Cited by:
  1. Antonis Adam & Thomas Moutos, 2006. "A Politico-Economic Analysis of Minimum Wages and Wage Subsidies," CESifo Working Paper Series, CESifo Group Munich 1810, CESifo Group Munich.
  2. Alok Kumar, 2008. "Capital Tax, Minimum Wage, and Labor Market Outcomes," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(1), pages 133-154, January.
  3. Gindling, T.H. & Terrell, Katherine, 2007. "The effects of multiple minimum wages throughout the labor market: The case of Costa Rica," Labour Economics, Elsevier, Elsevier, vol. 14(3), pages 485-511, June.
  4. Cahuc, Pierre & Laroque, Guy, 2007. "Optimal Taxation and Monopsonistic Labour Market: Does Monopsony Justify the Minimum Wage?," CEPR Discussion Papers, C.E.P.R. Discussion Papers 6416, C.E.P.R. Discussion Papers.
  5. Marx, Ive & Vanhille, Josefine & Verbist, Gerlinde, 2011. "Combating In-Work Poverty in Continental Europe: An Investigation Using the Belgian Case," IZA Discussion Papers 6067, Institute for the Study of Labor (IZA).
  6. Ive Marx & Sarah Marchal & Brian Nolan, 2012. "GINI DP 56: Mind the Gap: Net Incomes of Minimum Wage Workers in the EU and the US," GINI Discussion Papers, AIAS, Amsterdam Institute for Advanced Labour Studies 56, AIAS, Amsterdam Institute for Advanced Labour Studies.
  7. Isabelle Méjean & Lise Patureau, 2007. "Location Decisions and Minimum Wages," Working Papers, CEPII research center 2007-16, CEPII research center.
  8. David Lee & Emmanuel Saez, 2008. "Optimal Minimum Wage Policy in Competitive Labor Markets," NBER Working Papers 14320, National Bureau of Economic Research, Inc.
  9. Melchor Fernández & Alberto Meixide & Hipólito J. Simón, . "El trabajo de bajos salarios en España," Studies on the Spanish Economy, FEDEA 152, FEDEA.
  10. David Lee & Emmanuel Saez, 2008. "Optimal Minimum Wage Policy in Competitive Labor Markets," Working Papers, Princeton University, Department of Economics, Center for Economic Policy Studies. 1099, Princeton University, Department of Economics, Center for Economic Policy Studies..
  11. Arantza Gorostiaga & Juan Francisco Rubio-Ramírez, 2004. "Optimal minimum wage in a competitive economy," Working Paper, Federal Reserve Bank of Atlanta 2004-30, Federal Reserve Bank of Atlanta.
  12. Gorostiaga, Arantza & Rubio-Ramirez, Juan F., 2007. "Optimal minimum wage in a competitive economy: An alternative modelling approach," Economic Modelling, Elsevier, Elsevier, vol. 24(5), pages 778-796, September.
  13. Koeniger, Winfried, 2001. "Trade, Labor Market Rigidities, and Government-Financed Technological Change," IZA Discussion Papers 241, Institute for the Study of Labor (IZA).
  14. Nguyen Viet Cuong, 2014. "Do Minimum Wages Affect Firms’ Labor and Capital? Evidence from Vietnam," Working Papers, Department of Research, Ipag Business School 2014-179, Department of Research, Ipag Business School.
  15. Marx, Ive & Marchal, Sarah & Nolan, Brian, 2012. "Mind the Gap: Net Incomes of Minimum Wage Workers in the EU and the US," IZA Discussion Papers 6510, Institute for the Study of Labor (IZA).
  16. Lee, David & Saez, Emannuel, 2010. "Optimal Minimum Wage Policy in Competitive Labor Markets," Institute for Research on Labor and Employment, Working Paper Series, Institute of Industrial Relations, UC Berkeley qt07w2z7t6, Institute of Industrial Relations, UC Berkeley.
  17. Skedinger, Per, 2007. "The Design and Effects of Collectively Agreed Minimum Wages: Evidence from Sweden," Working Paper Series, Research Institute of Industrial Economics 700, Research Institute of Industrial Economics.
  18. Lee, David & Saez, Emmanuel, 2012. "Optimal minimum wage policy in competitive labor markets," Journal of Public Economics, Elsevier, Elsevier, vol. 96(9-10), pages 739-749.

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