Dealing with monopsony power: Employment subsidies vs. minimum wages

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Title: Dealing with monopsony power: Employment subsidies vs. minimum wages
Authors: Strobl, Eric
Walsh, Frank
Permanent link: http://hdl.handle.net/10197/8055
Date: Jan-2007
Abstract: We show in a monopsony model that accounting for changes in hours a minimum wage has ambiguous effects on employment and welfare. When all workers have the same preference ordering over leisure and consumption employment subsidies unambiguously improve welfare. Many countries have minimum wages and also tax minimum wage workers.
Type of material: Journal Article
Publisher: Elsevier
Copyright (published version): 2007 Elsevier
Keywords: Monopsony;Minimum wages;Hours worked;Productivity
DOI: 10.1016/j.econlet.2006.08.005
Language: en
Status of Item: Peer reviewed
Appears in Collections:Economics Research Collection

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