Deserving Poor and the Desirability of Minimum Wage Rules

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.

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Year of publication:	2014
Authors:	Blumkin, Tomer ; Danziger, Leif
Institutions:	CESifo
Subject:	redistribution \| minimum wage \| efficient rationing

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Extent:	application/pdf
Series:	CESifo Working Paper Series.
Type of publication:	Book / Working Paper
Notes:	Number 4721
Classification:	D60 - Welfare Economics. General ; H20 - Taxation, Subsidies, and Revenue. General ; H50 - National Government Expenditures and Related Policies. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010877848