Capital mobility, search unemployment and labor market policies: The case of minimum wages

Frédéric Gavrel

Working Papers from HAL

Abstract: In order to study the in uence of capital mobility on labor market policy, this paper adapts the search-matching approach to an economy with an exogenous stock of capital. Contrary to most matching models, laissez-faire is unavoidably ine cient. However, public policy can neutralize this market failure by implementing a minimum wage. This result leads us to address a much-debated issue: Does capital mobility constrain labor market policies when governments cannot cooperate? To that end we extend the analysis to a n-country symmetric model where the setting of minimum wages results from a Nash non-cooperative game. We nd that, in this context, capital mobility does not a ect the e ciency of public policy.

Keywords: Capital mobility; Search unemployment; Minimum wage effi ciency (search for similar items in EconPapers)
Date: 2013-03
New Economics Papers: this item is included in nep-dge and nep-lab
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00856270
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://shs.hal.science/halshs-00856270/document (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:halshs-00856270

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().