This paper shows that a graduated minimum wage, in contrast to a constant minimum wage, can provide a strict Pareto … improvement over what can be achieved with an optimal income tax. The reason is that a graduated minimum wage requires high … mimic the latter. In effect, a graduated minimum wage allows the low-productivity workers to benefit from second …

This paper shows that a graduated minimum wage, in contrast to a constant minimum wage, can provide a strict Pareto … improvement over what can be achieved with an optimal income tax. The reason is that a graduated minimum wage requires high … mimic the latter. In effect, a graduated minimum wage allows the low-productivity workers to benefit from second …