A politico-economic analysis of minimum wages and wage subsidies

Antonis Adam () and Thomas Moutos ()

Economics Letters, 2011, vol. 110, issue 3, pages 171-173

Abstract: This paper constructs a political economy model in which minimum wages are determined according to majority voting. Using the minimum wage scheme as the status quo, we show that the replacement of minimum wages by wage subsidies is not likely to receive political support unless it is supplemented by increased taxation of profits (after-tax profits are also likely to increase).

Keywords: Minimum; wages; Wage; subsidies; Majority; voting; Political; economy (search for similar items in EconPapers)
Date: 2011
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Related works:
Working Paper: A Politico-Economic Analysis of Minimum Wages and Wage Subsidies (2006)
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Persistent link: http://EconPapers.repec.org/RePEc:eee:ecolet:v:110:y:2011:i:3:p:171-173

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