Participation, Recruitment Selection, and the Minimum Wage

Frédéric Gavrel

Working Papers from HAL

Abstract: This paper reexamines the e ciency of participation with heterogeneous workers in a search-matching model with bargained wages and free entry. As- suming that rms hire their best applicants, we state that participation is insu cient whatever workers' bargaining strengths. The reason for this is that, when holding a job, the marginal participant should receive the entire output. As a consequence, introducing a (small) minimum wage raises participation, job creation, and employment. Therefore the aggregate income of the economy is enhanced.

Keywords: heterogeneous workers; participation; search and maching; applicant ranking; efficiency; minimum wage (search for similar items in EconPapers)
Date: 2014-02
New Economics Papers: this item is included in nep-dge, nep-ger and nep-lab
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00972289v1
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Related works:
Journal Article: Participation, Recruitment Selection, and the Minimum Wage (2015)
Working Paper: Participation, Recruitment Selection, and the Minimum Wage (2015)
Working Paper: Participation, Recruitment Selection, and the Minimum Wage (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:halshs-00972289

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