Are low wages a way for the unemployed to switch to higher-paying jobs? Using data from the British Household Panel Survey (BHPS), the labour market dynamics of unemployed, low-paid, and higher-paid employed men are analysed. Moreover, the respective (un)employment duration and occupational...

In this paper a labor supply model with demand side rationing is estimated to analyze the economic policies that directly affect incentives to work as well as labor costs. The framework is applied to evaluate the employment effects of a federal minimum wage in Germany and the impact of employer-...