Working Paper
Minimum Wages, Capital Accumulation and Worker's Incomes
George Economides, Thomas Moutos
CESifo, Munich, 2014
CESifo Working Paper No. 4821
CESifo, Munich, 2014
CESifo Working Paper No. 4821
Using an intertemporal model of saving and capital accumulation we demonstrate that it is impossible for any binding minimum wage to increase the after-tax incomes of workers if the production function is Cobb-Douglas with constant returns to scale, or if there are no differences in ability among workers.
CESifo Category
Labour Markets
Fiscal Policy, Macroeconomics and Growth
Labour Markets
Fiscal Policy, Macroeconomics and Growth
Keywords: minimum wage, capital accumulation, heterogeneity, unemployment
JEL Classification: E210, E240, E640, H230, J230