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Do labor costs affect companies' demand for labor?

Listed author(s):
  • Daniel S. Hamermesh

    (University of Texas at Austin, USA)

Higher labor costs (higher wage rates and employee benefits) make workers better off, but they can reduce companies' profits, the number of jobs, and the hours each person works. Overtime pay, hiring subsidies, the minimum wage, and payroll taxes are just a few of the policies that affect labor costs. Policies that increase labor costs can substantially affect both employment and hours, in individual companies as well as the overall economy.

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Article provided by Institute for the Study of Labor (IZA) in its journal IZA World of Labor.

Volume (Year): (2014)
Issue (Month): (May)
Pages: 1-3

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Handle: RePEc:iza:izawol:journl:y:2014:n:3
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References listed on IDEAS
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  1. David Neumark & William L. Wascher, 2008. "Minimum Wages," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262141027, January.
  2. Daron Acemoglu & David H. Autor & David Lyle, 2004. "Women, War, and Wages: The Effect of Female Labor Supply on the Wage Structure at Midcentury," Journal of Political Economy, University of Chicago Press, vol. 112(3), pages 497-551, June.
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