The elasticity of labor demand and the minimum wage

Arbeitspapier

We show that, contrary to widespread belief, low-pay workers do not generally prefer that the minimum wage rate be increased until the labor demand is unitary elastic. Rather, there exists a critical value of elasticity of labor demand so that increases in the minimum wage rate make low-pay workers better off for higher elasticities, but worse off for lower elasticities. This critical value decreases with unemployment benefits and increases with workers' risk aversion. We also show that in some countries the benefits for long-term unemployed are so low that workers would probably prefer that the minimum wage rate be decreased.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IZA Discussion Papers ; No. 3150

Klassifikation und Themen

• Klassifikation: Wirtschaft
• Thema: Elasticity of labor demand ; minimum wage ; Arbeitsnachfrage ; Preiselastizität ; Mindestlohn ; Arbeitslosenversicherung ; Arbeitslosigkeit ; Risikoaversion ; Theorie ; OECD-Staaten

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Danziger, Leif
• Ereignis: Veröffentlichung
• (wer): Institute for the Study of Labor (IZA)
• (wo): Bonn
• (wann): 2007

Weitere Informationen

• Handle: http://hdl.handle.net/10419/34553
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ