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Minimum wages, human capital, employment and growth

Ragacs, Christian (2002) Minimum wages, human capital, employment and growth. Department of Economics Working Paper Series, 81. Inst. für Volkswirtschaftstheorie und -politik, WU Vienna University of Economics and Business, Vienna.

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Abstract

This paper deals with the effects of minimum wages on human capital accumulation, and steady state employment and growth. The minimum wage is introduced in a model of endogenous growth driven by human capital accumulation. Unemployed agents maximize utility given the information that they are unemployed facing changed budget constraints. This situation is implemented in a "non-market-clearing equilibrium" framework. We show that the steady state rate of growth is not affected by the minimum wage and that in the steady state the system yields full employment. These effects are generated by intertemporal adjustments of the employed households who re-act to the relatively higher minimum wage which increases skills accumulation. (author's abstract)

Item Type: Paper
Additional Information: a strongly revised version of this paper appeared in: Ragacs, Christian ( 2004), Minimum Wages and Employment - Static and Dynamic Non-Market Clearing Equilibrium Models, Palgrave/Macmillan, London
Keywords: minimum wages / employment / non-market clearing general equilibrium / endogenous growth
Classification Codes: JEL E24, J5, O15, J41
Divisions: Departments > Volkswirtschaft
Depositing User: Repository Administrator
Date Deposited: 02 Sep 2002 13:51
Last Modified: 08 Jun 2011 13:27
WU Online Catalog: http://onlinekatalog.wu.ac.at/F?func=find-b&reques...
URI: http://epub.wu.ac.at/id/eprint/224

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