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| Author: | Askenazy, P. |
| Title: | Minimum wage, exports and growth |
| Journal: | European Economic Review
2003 : FEB, VOL. 47:1, p. 147-164 |
| Index terms: | Pay Minimum wage Growth Welfare Exports Models |
| Language: | eng |
| Abstract: | Using an endogenous growth model in an open economy, the impact of minimum wages on growth for an innovator country is studied. It is stated that a minimum wage - herein m.w - shifts efforts from production to R&D, but only in an open economy. Thus, it speeds up long-run growth in proportional to exports. Calibrations suggest the growth surplus can be significant. An empirical study on 11 OECD countries illustrates these results. The impact on welfare is ambiguous because the m.w. induces unemployment. However, it is shown that in an open economy, a m.w. associated with unemployment benefits can Pareto dominate laissez-faire. |
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