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The Minimum Wage and a Non-Competitive Market for Qualifications
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics.ORCID iD: 0000-0001-9244-7018
Keele Management School, Keele University, Keele, ST5 5BG, UK.
(English)Manuscript (preprint) (Other academic)
Abstract [en]

In this paper we consider an equilibrium model of demand and supply for several qualifications first in a competitive setting and then in a non-competitive setting. We propose a tractable analytical framework, i.e. when workers choose between qualifications according to a multinomial logit model of choice and when a CES production function describes the substitutions possibilities between the different types of labour. While in the competitive case the effects of the minimum wage are those we expect, in the imperfectly competitive case we find that a minimum wage can create unemployment and we find that the welfare of the population as a function of the minimum wage is not unimodal. We show furthermore that allowing one qualification to be exempted from the minimum wage does not mean that its relative demand is unaffected by changes to the minimum wage.

Keywords [en]
Minimum wage, wage differentials, segmented labour markets, monopsony
National Category
Economics
Identifiers
URN: urn:nbn:se:umu:diva-168820Local ID: No 906OAI: oai:DiVA.org:umu-168820DiVA, id: diva2:1413861
Available from: 2020-03-11 Created: 2020-03-11 Last updated: 2020-03-11

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fulltext(498 kB)339 downloads
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Lanot, Gauthier

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CiteExportLink to record
Permanent link

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Cite
Citation style
  • apa
  • ieee
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf