Layoff taxes and minimum wage: Two complementary public policies

Frédéric Gavrel, Isabelle Lebon and Therese Rebiere

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Abstract: In a matching model in which the job destruction rate and the output are endogenous, we show that the presence of a binding minimum wage prompts firms to choose too risky jobs. Introducing layoff taxes therefore reduces unemployment and improves market efficiency.

Keywords: Employment protection; layoff taxes; minimum wage; equilibrium unemployment; market efficiency (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (1)

Published in Economics Letters, 2010, 107 (1), pp.30-32. ⟨10.1016/j.econlet.2009.12.016⟩

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Related works:
Journal Article: Layoff taxes and minimum wage: Two complementary public policies (2010)
Working Paper: Layoff Taxes and Minimum Wage. Two Complementary Public Policies (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00545212

DOI: 10.1016/j.econlet.2009.12.016

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