Minimum wage, exports and growth

Philippe Askenazy ()

CEPREMAP Working Papers (Couverture Orange) from CEPREMAP

Abstract: Using an endogenous growth model in an open economy, we study the impact of minimum wages on growth for an innovator country. We state that a minimum wage shifts efforts from production to R&D, but only in an open economy. Thus, it speeds up long-run growth in proportional to exports. Calibrations suggest the growth surplus can be significant. An empirical study on 11 OECD countries illustrate these results. The impact on welfare is ambiguous because the minimum wage induces unemployment. However, we show that in an open economy, a minimum wage associated with unemployment benefits can pareto dominate "laissez faire".

JEL-codes: E1 F43 J31 (search for similar items in EconPapers)
Date: 2001
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Persistent link: http://EconPapers.repec.org/RePEc:cpm:cepmap:0109

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