A Pareto-Improving Minimum Wage

Research, Article, Preprint English OPEN
Danziger, Eliav; Danziger, Leif;
(2014)
  • Publisher: Bonn: Institute for the Study of Labor (IZA)
  • Journal: volume 82,pages236-252issn: 0013-0427
  • Related identifiers: doi: 10.1111/ecca.12119
  • Subject: Pareto improvement | graduated minimum wage, Pareto improvement | Pareto improvement, graduated minimum wage | J30 | graduated minimum wage
    • jel: jel:J30
      ddc: ddc:330

This paper shows that a graduated minimum wage, in contrast to a constant minimum wage, can provide a strict Pareto improvement over what can be achieved with an optimal income tax. The reason is that a graduated minimum wage requires high-productivity workers to work m... View more
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