| Author: | Cahuc, P. Michel, P. |
| Title: | Minimum wage unemployment and growth |
| Journal: | European Economic Review
1996 : AUG, VOL. 40:7, p. 1463-1482 |
| Index terms: | COMPANIES MINIMUM WAGE UNEMPLOYMENT GROWTH HUMAN CAPITAL EDUCATION |
| Language: | eng |
| Abstract: | The paper shows that minimum wage legislation, in an overlapping generations model with endogenous growth, does not necessarily have negative consequences on economic performance. Such legislation can have positive effects on growth by inducing more human capital accumulation. To be more precise, a low demand for unskilled labour, induced by a minimum wage may create an incentive for workers to accumulate human capital. In addition, it is possible that a decrease in the minimum wage lowers the welfare of each agent in the economy. |
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