Implications for minimum-wage policies of an S-shaped labor–supply curve
- 作者：Dessing ; Maryke
- 关键词：J38 (wages ; compensation ; and labor costs ; public policy) ; J21 (labor force and employment ; size and structure) ; I3 (welfare and poverty ; general) ; Minimum wages ; Excess labor supply ; Poverty trap ; Two-sector model ; Developing countries
- 刊名：Journal of Economic Behavior and Organization
- 出版年：2004
- 期刊代码：36_01672681
- 类别：eco
- 出版时间：April, 2004
- 卷：53
- 期：4
- 页码：543-568
- 文件大小：218 K
摘要
A model of family labor supply provides a rationale for raising minimum wages when the labor–supply response is negative at low wages. Under those circumstances, the labor market can be caught in a Malthusian poverty trap of excess supply (unemployment, overextended workdays, child labor) and falling wages. Raising minimum wages may therefore help resorb this excess supply and stabilize the labor market, setting a “virtuous” cycle in motion. In a two-sector context, such a policy would increase wages in both the covered and uncovered sectors. Evidence from a study of Costa Rica, in particular, is consistent with those conclusions.