Spillover Effects of Minimum Wages: Theory and Experimental Evidence

Research, Preprint OPEN
Marcus Dittrich ; Andreas Knabe ; Kristina Leipold (2011)
  • Publisher: Munich: Center for Economic Studies and Ifo Institute (CESifo)
  • Subject: bargaining | J38 | minimum wage, bargaining, Kalai-Smorodinsky solution, labor market experiments | Kalai-Smorodinsky solution | C91 | C71 | labor market experiments | minimum wage
    • jel: jel:C91 | jel:C71 | jel:J38
      ddc: ddc:330
    mesheuropmc: health care economics and organizations

We study the spillover effects of minimum wages in a laboratory experiment. In a bilateral firm-worker bargaining setting, we find that the introduction of a minimum wage exerts upward pressure on wages even if the minimum wage is too low to be a binding restriction. Fu... View more
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