Tackling labour market inequalities through minimum and maximum wages

Guilherme Spinato Morlin, Marco Stamegna, David Cano Ortiz, Simone D'Alessandro and Pietro Guarnieri

Discussion Papers from Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy

Abstract: The effectiveness of statutory minimum wages in reducing income inequality and alleviating working poverty is widely recognized in labour market policy discussions. Less attention has been paid to the potential of salary caps to further reduce wage disparities by targeting the top of the income distribution. In this paper, we simulate the introduction of statutory minimum and maximum wages in Italy using Eurogreen, a dynamic macro-simulation model that combines input output analysis with labour market heterogeneity. Our findings indicate that the joint implementation of the two policies can substantially reduce labour market inequalities across gender, skill levels, occupational categories, and industrial sectors, without negatively affecting the overall performance of the economy.

Keywords: Labour-market policy; Industry heterogeneity; gender gap; Dynamic Macrosimulation (search for similar items in EconPapers)
JEL-codes: E24 E27 J24 J31 (search for similar items in EconPapers)
Date: 2024-11-01
New Economics Papers: this item is included in nep-eur and nep-lma
Note: ISSN 2039-1854
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Persistent link: https://EconPapers.repec.org/RePEc:pie:dsedps:2024/320

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