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Do labor costs affect companies' demand for labor?

Daniel Hamermesh ()

IZA World of Labor, 2014, No 3, 3

Abstract: Higher labor costs (higher wage rates and employee benefits) make workers better off, but they can reduce companies' profits, the number of jobs, and the hours each person works. Overtime pay, hiring subsidies, the minimum wage, and payroll taxes are just a few of the policies that affect labor costs. Policies that increase labor costs can substantially affect both employment and hours, in individual companies as well as the overall economy.

Keywords: labor demand; wages; employee benefits (search for similar items in EconPapers)
JEL-codes: J23 J20 (search for similar items in EconPapers)
Date: 2014
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