Minimum Wages For Ronald Mcdonald Monopsonies: A Theory Of Monopsonistic Competition  

Oleh:

Bhaskar, V. ; To, Ted

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Economic Journal (EBSCO) vol. 109 no. 455 (Apr. 1999), page 190-203.
Topik: monopsionies; theory
Fulltext: 190.pdf (206.89KB)

Isi artikel

Recent empirical work on the effects of minimum wages has called into question the conventional wisdom that minimum wages invariably reduce employment. We develop a model of monopsonistic competition with free entry to analyse the effects of minimum wages, and our predictions ®t the empirical results closely. Under monopsonistic competition, we ®nd that a rise in the minimum wage raises employment per ®rm, causes ®rm exit and may increase or reduce industry employment. Minimum wages increase welfare if they raise industry employment but welfare effects are ambiguous if employment falls.

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