On-the-Job Search, Minimum Wages, and Labor Market Outcomes in an Equilibrium Bargaining Framework

James Mabli and Christopher Flinn

No 791, 2007 Meeting Papers from Society for Economic Dynamics

Abstract: We look at the impact of a binding minimum wage on labor market equilibrium outcomes and welfare distributions in a model of bilateral matching and bargaining in the presence of on-the-job search. The model is estimated using the method of simulated moments using data taken from the Survey of Income and Program Participation. Even though individuals are paid the minimum wage for a small proportion of their labor market careers, we find the efficient level of the minimum wage to be high, even when allowing for endogenous contact rates via the matching function.

Date: 2007
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Working Paper: On-the-Job Search, Minimum Wages, and Labor Market Outcomes in an Equilibrium Bargaining Framework (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed007:791

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