Resource title

Getting It Right: Employment Subsidy or Minimum Wage?

Resource image

image for OpenScout resource :: Getting It Right: Employment Subsidy or Minimum Wage?

Resource description

In monopsony models of the labour market either a minimum wage or an employment subsidy financed by a lump sum tax on profits can achieve the efficient level of employment and output. Incorporating working conditions into a monopsony model where higher wages raise firm labour supply, but less attractive working conditions reduce it, changes these policy implications. Specifically, a minimum wage policy could, in contrast to an employment subsidy, cause working conditions to deteriorate and welfare to fall. Empirical evidence from the Republic of Trinidad and Tobago shows that a minimum wage may indeed cause working conditions to worsen.

Resource author

Eric Strobl, Frank A. Walsh

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/20831

Resource license

Adapt according to the presented license agreement and reference the original author.