"An Efficiency Enhancing Minimum Wage"
Publication
, Journal Article
Gokcekus, O; Tower, E
Published in: Journal of Policy Reform
March 2003
We consider an economy (e.g., Chile 1973-83 or modern Turkey) with a minimum wage sector and a free sector, and a tax on labor earnings. We ask “Can a slightly binding minimum wage simultaneously raise tax revenue, employment, and economic efficiency?” We answer “Yes, if the elasticity of demand for labor in the free sector exceeds the elasticity of demand in the minimum-wage sector.” The logical key is that the minimum wage draws high reservation- wage workers into the labor force, who give up untaxed leisure in exchange for taxed work and thereby increase revenue, employment and efficiency.
Duke Scholars
Published In
Journal of Policy Reform
Publication Date
March 2003
Volume
7
Issue
2
Start / End Page
22pp.
Related Subject Headings
- 1605 Policy and Administration
- 1402 Applied Economics
Citation
APA
Chicago
ICMJE
MLA
NLM
Gokcekus, O., & Tower, E. (2003). "An Efficiency Enhancing Minimum Wage". Journal of Policy Reform, 7(2), 22pp.
Gokcekus, Omer, and E. Tower. “"An Efficiency Enhancing Minimum Wage".” Journal of Policy Reform 7, no. 2 (March 2003): 22pp.
Gokcekus O, Tower E. "An Efficiency Enhancing Minimum Wage". Journal of Policy Reform. 2003 Mar;7(2):22pp.
Gokcekus, Omer, and E. Tower. “"An Efficiency Enhancing Minimum Wage".” Journal of Policy Reform, vol. 7, no. 2, Mar. 2003, p. 22pp.
Gokcekus O, Tower E. "An Efficiency Enhancing Minimum Wage". Journal of Policy Reform. 2003 Mar;7(2):22pp.
Published In
Journal of Policy Reform
Publication Date
March 2003
Volume
7
Issue
2
Start / End Page
22pp.
Related Subject Headings
- 1605 Policy and Administration
- 1402 Applied Economics