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Author: | Cachuc, P. Saint-Martin, A. Zylberberg, A. |
Title: | The consequences of the minimum wage when other wages are bargained over |
Journal: | European Economic Review
2001 : FEB, VOL. 45:2, p. 337-352 |
Index terms: | MINIMUM WAGE PAY EMPLOYMENT |
Language: | eng |
Abstract: | This paper examines the impact of a binding minimum wage in a situation where unions dominated by skilled workers set wages. It is shown that the relationship between the minimum wage, the bargained wage and employment of skilled and unskilled workers depends on the magnitude of the elasticity of substitution between skilled and unskilled labour. Cases where minimum wage hikes increase both overall and unskilled employment are exhibited. |
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