Minimum wage policy with optimal taxes and unemployment

• 成果类型: Article
• 署名作者: Lavecchia, Adam M.
• 署名单位: McMaster University
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2020.104228
• 发表日期: 2020
• 关键词: Minimum wage; sufficient statistics; optimal policy; labor force participation

摘要

Using a search model, 1 derive a formula that links the welfare gains from the minimum wage to its effect on low-skilled labor force participation and employment. This formula shows that the minimum wage is welfare improving if pushing the low-skilled labor market tightness downwards brings it closer to its efficient level. 1 estimate the causal effect of the minimum wage on low-skilled labor force participation and employment using federal and state minimum wage variation. I discuss the policy implications of my estimates when viewed through the lens of the marginal welfare gain formula. (C) 2020 Elsevier B.V. All rights reserved.