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  5. Comment on 'minimum wages for Ronald McDonald monopsonies: a theory of monopsonistic competition'
 
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Comment on 'minimum wages for Ronald McDonald monopsonies: a theory of monopsonistic competition'

File(s)
FileDescriptionSizeFormat
Download ejcomment4.doc190 KB
Author(s)
Walsh, Frank 
Uri
http://hdl.handle.net/10197/8050
Date Issued
10 July 2003
Date Available
13T12:21:42Z October 2016
Abstract
Bhaskar and To (1999) develop a model of monopsonistic competition and solve explicitly for equilibrium. While a minimum wage set just above the unconstrained optimum leads firms to increase employment it also causes firm exit as profits fall. In this note I show that the employment and welfare effects of the minimum wage which Bhaskar and To had thought to be ambiguous when firm exit was accounted for are in fact unambiguously positive. The model can be adjusted so that the original ambiguous employment effect results. A decomposition is developed which allows us to calculate the long run employment effect.
Type of Material
Journal Article
Publisher
Wiley
Journal
Economic Journal
Volume
113
Issue
489
Start Page
718
End Page
722
Copyright (Published Version)
2003 Royal Economic Society
Keywords
  • Monopsony

  • Minimum wages

  • Employment

Classification
J42
J30
DOI
10.1111/1468-0297.t01-1-00148
Language
English
Status of Item
Peer reviewed
This item is made available under a Creative Commons License
https://creativecommons.org/licenses/by-nc-nd/3.0/ie/
Owning collection
Economics Research Collection
Scopus© citations
8
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Jan 26, 2023
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