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Allocating Jobs under a Minimum Wage: Queues vs. Lotteries

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  • Gang, Ira N
  • Tower, Edward

Abstract

In this paper we provide a simple diagrammatic technique of incorporating variable labor supply into the specific factors model. We then use the framework to analyze the positive and normative effects of a minimum wage both with a broadly based employment lottery (on-the-job search) and with an employment queue (the Harris-Todaro case). We discover that with a given minimum wage replacing the queue with a lottery may be welfare reducing. Copyright 1990 by The Economic Society of Australia.

Suggested Citation

  • Gang, Ira N & Tower, Edward, 1990. "Allocating Jobs under a Minimum Wage: Queues vs. Lotteries," The Economic Record, The Economic Society of Australia, vol. 66(194), pages 186-194, September.
  • Handle: RePEc:bla:ecorec:v:66:y:1990:i:194:p:186-94
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    References listed on IDEAS

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    11. Mark Armstrong & Simon Cowan & John Vickers, 1994. "Regulatory Reform: Economic Analysis and British Experience," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262510790, January.
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    Cited by:

    1. Omer Gokcekus & Edward Tower, 2003. "An Efficiency Enhancing Minimum Wage," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 6(4), pages 247-259.
    2. Ira N. Gang & Myeong-Su Yun, 2006. "Immigration Amnesty and Immigrant's Earnings," Departmental Working Papers 200632, Rutgers University, Department of Economics.

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