Wages,selectivity, and vacancies: Evaluating the short-term and long-term impact of the minimum wage on unemployment |
| |
Authors: | Fré dé ric Gavrel,Isabelle Lebon,Thé rè se Rebiè re |
| |
Affiliation: | 1. CREM-CNRS, Department of Economics, University of Caen, 19 rue Claude Bloch, 14032 Caen cedex, France;2. CERENE, Department of Economics, University of Le Havre, 25 rue Philippe Lebon, BP420, 76057 Le Havre cedex, France |
| |
Abstract: | Using a circular matching model (Marimon R, Zilibotti F. Unemployment vs. mismatch of talents: Reconsidering unemployment benefits. Economic Journal 1999;109; 266–291), where the wage setting is similar to Weiss (Weiss A. Job queues and layoffs in labor markets with flexible wages. Journal of Political Economy 1980; 88; 526–538), we reexamine Card and Krueger's (Card, D., Krueger, A. Myth and Measurement, the New Economics of the Minimum Wage. Princeton University Press; 1995) intuition on the impact of the minimum wage on unemployment. In the short term, a rise in the minimum wage increases the employment level by making firms less selective. In the long term, numerical simulations show that, despite the reduction of job creation, introducing a minimum wage may lower unemployment as soon as workers and jobs are sufficiently differentiated. However, beyond some limit, the wage increase raises unemployment whatever the degree of differentiation is. |
| |
Keywords: | E24 J64 J65 |
本文献已被 ScienceDirect 等数据库收录! |
|