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Deserving poor and the desirability of a minimum wage

Tomer Blumkin () and Leif Danziger ()
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Tomer Blumkin: Ben-Gurion University
Leif Danziger: Ben-Gurion University

IZA Journal of Labor Economics, 2018, vol. 7, issue 1, 1-17

Abstract: Abstract This paper provides a normative justification for the use of a minimum wage as a redistributive tool in a competitive labor market. We show that a government interested in improving the wellbeing of the deserving poor, while being less concerned with their undeserving counterparts, can use a minimum wage to enhance the efficiency of the tax-and-transfer system in attaining this goal.

Keywords: Deserving poor; Minimum wage; Welfare; Redistribution (search for similar items in EconPapers)
JEL-codes: D6 H2 H5 (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1186/s40172-018-0066-7

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Handle: RePEc:spr:izalbr:v:7:y:2018:i:1:d:10.1186_s40172-018-0066-7