Arbeitspapier

The Endogenous Determination of Minimum Wage

In this paper we study the endogenous determination of minimum wage employing a political-economic game-theoretic approach. A major objective of the paper is to clarify the crucial role of the strength of the workers? union and of political culture on the determination of the minimum wage. In general, the equilibrium minimum wage differs from that postulated in the literature. In our uncertain environment the optimal minimum wage from the workers? union point of view is lower than the level that maximizes its objective function in a certain environment where there is no opposition to the proposed minimum wage. We establish that a political culture that assigns a positive weight to the public well being can give rise to a wage that equals or exceeds these levels.

Sprache
Englisch

Erschienen in
Series: IZA Discussion Papers ; No. 73

Klassifikation
Wirtschaft
Wages, Compensation, and Labor Costs: Public Policy
Thema
Minimum wage
endogenous determination
political culture
public policy
Mindestlohn
Public Choice
Spieltheorie
Gewerkschaftlicher Organisationsgrad
Politische Kultur
Theorie

Ereignis
Geistige Schöpfung
(wer)
Epstein, Gil S.
Nitzan, Shmuel
Ereignis
Veröffentlichung
(wer)
Institute for the Study of Labor (IZA)
(wo)
Bonn
(wann)
1999

Handle
Letzte Aktualisierung
10.03.2025, 11:42 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Epstein, Gil S.
  • Nitzan, Shmuel
  • Institute for the Study of Labor (IZA)

Entstanden

  • 1999

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