Minimum wages, wage dispersion and unemployment : a review on new search models
Abstract"This paper analyses theoretical effects of minimum wages on employment and the wage distribution under a frictional setting. I review new developments in search theory and discuss the influence of minimum wages on wages and employment under each setting. Thereby, a major theoretical focus of the paper is the integration of heterogeneity on both sides of the market in equilibrium search models. In the homogeneous case minimum wages do not affect employment, while in the heterogenous case theoretical results are mixed. There is no unique connection between unemployment and minimum wages, and the effect can be positive, zero or negative. However, the most advanced models, integrating heterogeneity on both sides of the market, seem to support the hypothesis that an increase in the minimum wage generally leads to an increase in unemployment as well." (Author's abstract, IAB-Doku) ((en))
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Bibliographic InfoPaper provided by Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany] in its series IAB Discussion Paper with number 200833.
Length: 40 pages
Date of creation: 12 Aug 2008
Date of revision:
Lohnpolitik; Mindestlohn; Beschäftigungseffekte; Einkommenseffekte; Lohndifferenzierung; Arbeitslosigkeit; Arbeitsplatzabbau; Lohntheorie; labour turnover; friktionelle Arbeitslosigkeit; Sucharbeitslosigkeit; Lohnstruktur; Arbeitsplatzsuchtheorie;
Find related papers by JEL classification:
- E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-08-21 (All new papers)
- NEP-LAB-2008-08-21 (Labour Economics)
- NEP-MAC-2008-08-21 (Macroeconomics)
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