Participation, Recruitment Selection, and the Minimum Wage

Frédéric Gavrel

Working Papers from HAL

Abstract: This paper reexamines the efficiency of participation with heterogeneous workers in a search-matching model with bargained wages and free entry. Assuming that firms hire their best applicants, we state that participation is insufficient whatever workers' bargaining strengths. The reason for this is that, when holding a job, the marginal participant should receive the entire output. As a consequence, introducing a (small) minimum wage raises participation, job creation, and employment. Therefore the aggregate income of the economy is enhanced.

Keywords: heterogeneous workers; participation; minimum wage; Search and matching; applicant ranking; effi ciency (search for similar items in EconPapers)
Date: 2014-02-14
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-00948453
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Related works:
Journal Article: Participation, Recruitment Selection, and the Minimum Wage (2015)
Working Paper: Participation, Recruitment Selection, and the Minimum Wage (2015)
Working Paper: Participation, Recruitment Selection, and the Minimum Wage (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:halshs-00948453

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