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Asymmetric Information Renders Minimum Wages Less Harmful

Author

Listed:
  • Ronnie Schöb
  • Marcel Thum

Abstract

We show that a minimum wage introduced in the presence of asymmetric information about worker productivities will lead to lower unemployment levels than predicted by the standard labour market model with heterogeneous labour and symmetric information.

Suggested Citation

  • Ronnie Schöb & Marcel Thum, 2009. "Asymmetric Information Renders Minimum Wages Less Harmful," CESifo Working Paper Series 2623, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_2623
    as

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    File URL: http://www.cesifo-group.de/DocDL/cesifo1_wp2623.pdf
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    References listed on IDEAS

    as
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    5. Alfons Weichenrieder, 1996. "Anti-tax-avoidance provisions and the size of foreign direct investment," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 3(1), pages 67-81, January.
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    More about this item

    Keywords

    minimum wages; unemployment; asymmetric information; labour market regulation;

    JEL classification:

    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General

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