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Publicado en: Artículo en revista académica

Can a non-binding minimum wage reduce wages and employment?

Alexandre Janiak; Sofía Bauducco

Macroeconomic Dynamics, publicada online en abril 2016

We show that, in the large-firm search model, employment may decrease even when the level of the introduced minimum wage lies below the equilibrium wage of the laissez-faire economy. Wages also decrease in the presence of the minimum wage. The argument is based on multiple equilibria and the idea that, in a large-firm context, the representative firm may choose to overemploy workers in order to renegotiate lower wages.

 

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