Collusion at the Non-Binding Minimum Wage: An Automatic Stabilizer?
AbstractThis paper examines unemployment dynamics through the lens of a wage-posting model with two sectors and two types of workers. The model assumptions include collusion at a non-binding minimum wage, costly entry and intersectoral labor mobility. Model simulations demonstrate that collusion at a non-binding minimum wage induces entry into the low-wage sector. This dampens the overall negative employment impact of economic downturns. The excess of low-wage vacancies has shown not only to secure low unemployment rates for the low-skilled workers, but also to provide employment opportunities for the high-skilled when their industries substantially decline.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Connecticut, Department of Economics in its series Working papers with number 2009-41.
Length: 40 pages
Date of creation: Dec 2009
Date of revision:
Contact details of provider:
Postal: University of Connecticut 341 Mansfield Road, Unit 1063 Storrs, CT 06269-1063
Phone: (860) 486-4889
Fax: (860) 486-4463
Web page: http://www.econ.uconn.edu/
More information through EDIRC
unemployment; search; minimum wage; collusion;
Find related papers by JEL classification:
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-01-10 (All new papers)
- NEP-DGE-2010-01-10 (Dynamic General Equilibrium)
- NEP-LAB-2010-01-10 (Labour Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Shapiro, Joel, 2004.
"Income taxation in a frictional labor market,"
Journal of Public Economics,
Elsevier, vol. 88(3-4), pages 465-479, March.
- Steven J. Davis & R. Jason Faberman & John Haltiwanger & Ron Jarmin & Javier Miranda, 2010.
"Business Volatility, Job Destruction, and Unemployment,"
American Economic Journal: Macroeconomics,
American Economic Association, vol. 2(2), pages 259-87, April.
- Steven J. Davis & R. Jason Faberman & John Haltiwanger & Ron Jarmin & Javier Miranda, 2007. "Business volatility, job destruction and unemployment," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
- Steven J. Davis & R. Jason Faberman & John Haltiwanger & Ron Jarmin & Javier Miranda, 2008. "Business Volatility, Job Destruction, and Unemployment," NBER Working Papers 14300, National Bureau of Economic Research, Inc.
- Steven Davis & R Jason Faberman & John Haltiwanger & Ron Jarmin & Javier Miranda, 2008. "Business Volatility, Job Destruction, and Unemployment," Working Papers 08-26, Center for Economic Studies, U.S. Census Bureau.
- Natalya Y. Shelkova, 2008.
"Low-wage labor markets amd the power of suggestion,"
1112, Princeton University, Department of Economics, Industrial Relations Section..
- Natalya Y. Shelkova, 2008. "Low-Wage Labor Markets and the Power of Suggestion," Working papers 2008-33, University of Connecticut, Department of Economics, revised Dec 2008.
- V. Bhaskar & Ted To, 1999.
"Oligopsony and the Distribution of Wages,"
Labor and Demography
- Burdett, Kenneth & Mortensen, Dale T, 1998. "Wage Differentials, Employer Size, and Unemployment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(2), pages 257-73, May.
- Albrecht, James & Tan, Serene & Gautier, Pieter & Vroman, Susan, 2004. "Matching with multiple applications revisited," Economics Letters, Elsevier, vol. 84(3), pages 311-314, September.
- James Albrecht & Gerard van den Berg & Susan Vroman, 2009.
"The Aggregate Labor Market Effects of the Swedish Knowledge Lift Program,"
Review of Economic Dynamics,
Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 129-146, January.
- Albrecht, James & van den Berg, Gerard J. & Vroman, Susan, 2006. "The Aggregate Labor Market Effects of the Swedish Knowledge Lift Program," IZA Discussion Papers 2385, Institute for the Study of Labor (IZA).
- Albrecht, James & van den Berg, Gerard J & Vroman, Susan, 2006. "The Aggregate Labour Market Effects of the Swedish Knowledge Lift Program," CEPR Discussion Papers 5927, C.E.P.R. Discussion Papers.
- Albrecht, James & van den Berg, Gerard J & Vroman, Susan, 2007. "The aggregate labor market effects of the Swedish knowledge lift program," Working Paper Series 2008:1, IFAU - Institute for Evaluation of Labour Market and Education Policy.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kasey Kniffin).
If references are entirely missing, you can add them using this form.