The Role of the Minimum Wage in the Welfare State: An Appraisal
40 Pages Posted: 10 Jul 2000
Date Written: May 2000
Abstract
In order to offer a balanced assessment of the role of minimum wages in the Welfare State, seven basic questions need to be answered: (i) Why is the minimum wage a useful redistributive tool? (ii) How binding are minimum wage floors in different countries? (iii) To what extent do minimum wages have the adverse consequences that standard analyses predict? (iv) Are there strong theoretical grounds underlying the revisionist results? (v) Who supports minimum wages? (vi) Under which conditions is the minimum wage a better tool than other policy instruments to achieve income redistribution? And, finally, (vii) What is the overall cross-country time-series evidence regarding the employment effect of the minima? The aim of this paper is to provide an appraisal on the available evidence for each of the above-mentioned issues.
JEL Classification: J31
Suggested Citation: Suggested Citation
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