Deserving poor and the desirability of minimum wage rules

Tomer Blumkin ; Leif Danziger

In this paper we provide a novel justification for the use of minimum wage rules to supplement the optimal tax-and-transfer system. We demonstrate that if labor supply decisions are concentrated along the intensive margin and employment is efficiently rationed, a minimum wage rule can be socially beneficial by serving as a tagging device that targets benefits to the deserving poor, defined as low-skilled workers exhibiting a weak taste for leisure.

Year of publication:	2014
Authors:	Blumḳin, Tomer ; Danziger, Leif
Publisher:	München : CESifo
Subject:	redistribution \| minimum wage \| efficient rationing \| Mindestlohn \| Minimum wage \| Theorie \| Theory \| Umverteilung \| Redistribution

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