Working Paper
Minimum Wage with Optimal Income Taxation
Tomer Blumkin, Efraim Sadka
CESifo, Munich, 2004
CESifo Working Paper No. 1125
CESifo, Munich, 2004
CESifo Working Paper No. 1125
Minimum wage legislation is a standard policy tool in most countries. However, the overall merits of minimum wage are controversial due to its potential adverse effects on unemployment. In this paper we construct a simple model in which minimum wage plays an important re-distributive role, alongside income taxation, without generating adverse effects on unemployment.
CESifo Category
Public Finance
Public Finance
JEL Classification: D600,H200