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The Role of the Minimum Wage in the Welfare State: An Appraisal

Author

Listed:
  • Dolado, Juan J.

    () (European University Institute)

  • Felgueroso, Florentino

    () (FEDEA, Madrid)

  • Jimeno, Juan F.

    () (Bank of Spain)

Abstract

In order to offer a balanced assessment of the role of minimum wages in the Welfare State, seven basic questions need to be answered: (i) Why is the minimum wage a useful redistributive tool?; (ii) How binding are minimum wage floors in different countries?; (iii) To what extent do minimum wages have the adverse consequences that standard analysis predict?; (iv) Are there strong theoretical grounds underlying the revisionist results?; (v) Who supports minimum wages?; (vi) Under which conditions is the minimum wage a better tool than other policy instruments to achieve income redistribution?; and, finally, (vii) What is the overall cross-country time-series evidence regarding the employment effect of the minima? The aim of this paper is to provide an appraisal on the available evidence for each of the above-mentioned issues.

Suggested Citation

  • Dolado, Juan J. & Felgueroso, Florentino & Jimeno, Juan F., 2000. "The Role of the Minimum Wage in the Welfare State: An Appraisal," IZA Discussion Papers 152, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp152
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    References listed on IDEAS

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    Cited by:

    1. Adam, Antonis & Moutos, Thomas, 2011. "A politico-economic analysis of minimum wages and wage subsidies," Economics Letters, Elsevier, vol. 110(3), pages 171-173, March.
    2. Gorostiaga Alonso, Miren Arantzazu & Rubio-Ramírez, Juan F., 2004. "Optimal Minimum Wage in a Competitive Economy: an Alternative Modelling Approach," DFAEII Working Papers 2004-07, University of the Basque Country - Department of Foundations of Economic Analysis II.
    3. Marx, Ive & Marchal, Sarah & Nolan, Brian, 2012. "Mind the Gap: Net Incomes of Minimum Wage Workers in the EU and the US," IZA Discussion Papers 6510, Institute for the Study of Labor (IZA).
    4. Marx, Ive & Vanhille, Josefine & Verbist, Gerlinde, 2011. "Combating In-Work Poverty in Continental Europe: An Investigation Using the Belgian Case," IZA Discussion Papers 6067, Institute for the Study of Labor (IZA).
    5. Ive Marx & Sarah Marchal & Brian Nolan, 2012. "GINI DP 56: Mind the Gap: Net Incomes of Minimum Wage Workers in the EU and the US," GINI Discussion Papers 56, AIAS, Amsterdam Institute for Advanced Labour Studies.
    6. Arantza Gorostiaga & Juan Francisco Rubio-Ramírez, 2004. "Optimal minimum wage in a competitive economy," FRB Atlanta Working Paper 2004-30, Federal Reserve Bank of Atlanta.
    7. Gindling, T.H. & Terrell, Katherine, 2007. "The effects of multiple minimum wages throughout the labor market: The case of Costa Rica," Labour Economics, Elsevier, vol. 14(3), pages 485-511, June.
    8. Lee, David & Saez, Emmanuel, 2012. "Optimal minimum wage policy in competitive labor markets," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 739-749.
    9. Eugenia Fotoniata & Thomas Moutos, 2010. "Greece: Neglect and Resurgence of Minimum Wage Policy," Chapters,in: The Minimum Wage Revisited in the Enlarged EU, chapter 7 Edward Elgar Publishing.
    10. repec:pri:cepsud:178lee is not listed on IDEAS
    11. Pierre Cahuc & Guy Laroque, 2014. "Optimal Taxation and Monopsonistic Labor Market: Does Monopsony Justify the Minimum Wage?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 16(2), pages 259-273, April.
    12. Koeniger, Winfried, 2001. "Trade, Labor Market Rigidities, and Government-Financed Technological Change," IZA Discussion Papers 241, Institute for the Study of Labor (IZA).
    13. Skedinger, Per, 2007. "The Design and Effects of Collectively Agreed Minimum Wages: Evidence from Sweden," Working Paper Series 700, Research Institute of Industrial Economics.
    14. Isabelle Méjean & Lise Patureau, 2007. "Location Decisions and Minimum Wages," Working Papers 2007-16, CEPII research center.
    15. David S. Lee & Emmanuel Saez, 2008. "Optimal Minimum Wage Policy in Competitive Labor Markets," Working Papers 1105, Princeton University, Department of Economics, Industrial Relations Section..
    16. Cuong Viet Nguyen, 2017. "Do minimum wages affect firms’ labor and capital? Evidence from Vietnam," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 22(2), pages 291-308, April.
    17. Per Skedinger, 2010. "Sweden: A Minimum Wage Model in Need of Modification," Chapters,in: The Minimum Wage Revisited in the Enlarged EU, chapter 12 Edward Elgar Publishing.
    18. Gorostiaga, Arantza & Rubio-Ramirez, Juan F., 2007. "Optimal minimum wage in a competitive economy: An alternative modelling approach," Economic Modelling, Elsevier, vol. 24(5), pages 778-796, September.
    19. Alok Kumar, 2008. "Capital Tax, Minimum Wage, and Labor Market Outcomes," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(1), pages 133-154, January.
    20. Méjean, Isabelle & Patureau, Lise, 2010. "Firms' location decisions and minimum wages," Regional Science and Urban Economics, Elsevier, vol. 40(1), pages 45-59, January.
    21. Melchor Fern·ndez & Alberto Meixide & HipÛlito J. SimÛn, "undated". "El trabajo de bajos salarios en Espana," Studies on the Spanish Economy 152, FEDEA.

    More about this item

    Keywords

    inequality; minimum wages; employment;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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