Layoff taxes and minimum wage: Two complementary public policies

In a matching model in which the job destruction rate and the output are endogenous, we show that the presence of a binding minimum wage prompts firms to choose too risky jobs. Introducing layoff taxes therefore reduces unemployment and improves market efficiency.

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Year of publication:	2010
Authors:	Gavrel, Frédéric ; Lebon, Isabelle ; Rebière, Thérèse
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 107.2010, 1, p. 30-32
Publisher:	Elsevier
Keywords:	Employment protection Layoff taxes Minimum wage Equilibrium unemployment Market efficiency

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008551321