Dealing with monopsony power: Employment subsidies vs. minimum wages

Eric Strobl () and Frank Walsh

Open Access publications from School of Economics, University College Dublin

Abstract: We show in a monopsony model that accounting for changes in hours a minimum wage has ambiguous effects on employment and welfare. When all workers have the same preference ordering over leisure and consumption employment subsidies unambiguously improve welfare. Many countries have minimum wages and also tax minimum wage workers.

Keywords: Monopsony; Minimum wages; Hours worked; Productivity (search for similar items in EconPapers)
JEL-codes: J42 J48 (search for similar items in EconPapers)
Pages: 7 pages
Date: 2007-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Published in: Economics Letters, 94(1) 2007-01

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http://hdl.handle.net/10197/8055 Open Access version, 2007 (application/pdf)

Related works:
Journal Article: Dealing with monopsony power: Employment subsidies vs. minimum wages (2007)
Working Paper: Dealing with monopsony power: Employment subsidies vs. minimum wages (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:ucn:oapubs:10197/8055

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