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Employment and the minimum wage: A pluralist approach

Author

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  • Bernhard Schütz

Abstract

When discussing the employment effects of minimum wages, mainstream economic discussion as well as mainstream economics textbooks mainly center around two variations of the neoclassical model: the model of the competitive and the monopsonistic labor market. The current paper offers a different perspective: it provides an assessment of the broader variety of existing theories and develops a new theoretical account which integrates these different views. For the comparison as well as for the later integration of these theories, it draws on an evolutionary economic concept: a micro-meso-macro framework. Here it shows that due to its simple structure and conceptual flexibility, the micro-meso-macro framework is very well suited to the task of integrating these different theoretical visions as well as assessing their evolutionary features. It follows from the analysis that from a theoretical viewpoint, the effect of the minimum wage on employment is indeed ambiguous, which is perfectly in line with the existing empirical evidence.

Suggested Citation

  • Bernhard Schütz, 2018. "Employment and the minimum wage: A pluralist approach," Economics working papers 2018-07, Department of Economics, Johannes Kepler University Linz, Austria.
    • Handle: RePEc:jku:econwp:2018_07
    Note: English
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    JEL classification:

    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets

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