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Special Issue: Issues in Asia. Guest Editor: Laixun Zhao

Chi-Chur Chao and Eden Siu Hung Yu

Review of Development Economics, 2014, vol. 18, issue 2, 195-202

Abstract: Using a general equilibrium model, this paper examines the employment and welfare effects of minimum wages coupled with capital taxes in a small open economy. The individual and joint optimal policies for a minimum wage and capital taxes are derived and explained. Specifically, policy reform to introduce a minimum wage while lowering the capital tax can be justified for some economies, notably, Hong Kong.

Date: 2014
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