Minimum wages and poverty with income-sharing |
| |
Authors: | Gary S Fields Ravi Kanbur |
| |
Institution: | (1) School Of Industrial And Labor Relations, Cornell University, 250 Ives Hall, Ithaca, NY 14853-3901, USA;(2) Cornell University, Ithaca, NY 14853, USA |
| |
Abstract: | Textbook analysis tells us that in a competitive labor market, the introduction of a minimum wage above the competitive equilibrium
wage will cause unemployment. This paper makes three contributions to the basic theory of the minimum wage. First, we analyze
the effects of a higher minimum wage in terms of poverty rather than in terms of unemployment. Second, we extend the standard
textbook model to allow for income-sharing between employed and unemployed persons in society. Third, we extend the basic
model to deal with income sharing within families. We find that there are situations in which a higher minimum wage raises poverty, others where it reduces poverty, and yet others in which poverty is unchanged. We characterize precisely how the poverty effect depends on four parameters: the degree of poverty aversion, the elasticity
of labor demand, the ratio of the minimum wage to the poverty line, and the extent of income-sharing. Thus, shifting the perspective
from unemployment to poverty leads to a considerable enrichment of the theory of the minimum wage.
|
| |
Keywords: | minimum wage poverty unemployment |
本文献已被 SpringerLink 等数据库收录! |
|