Worker heterogeneity and the asymmetric effects of minimum wages

Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F67985998%3A_____%2F19%3A00505070" target="_blank" >RIV/67985998:_____/19:00505070 - isvavai.cz</a>
Result on the web
<a href="https://www.cerge-ei.cz/pdf/wp/Wp642.pdf" target="_blank" >https://www.cerge-ei.cz/pdf/wp/Wp642.pdf</a>
DOI - Digital Object Identifier
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Result language
angličtina
Original language name
Worker heterogeneity and the asymmetric effects of minimum wages
Original language description
This paper explores the notion that minimum wages affect different lowskilled workers aszmmetrically due to productivity differences. In a search model with worker heterogeneity, a rising minimum wage lowers the employment and labor force participation of the least productive workers by pricing them out of the market, while having the opposite effect on other low-skilled workers that remain hirable. CPS data supports these predictions, a rise in the minimum reduces the employment and labor force participation of teenagers with less than high school education, but has the opposite effect on prime-age workers with high school attainment. The calibrated model requires small firm surpluses to match these observations. If firm surplus is small due to high nonmarket activity values, a moderate rise in the minimum improves aggregate welfare even when the worker's bergaining weight is high.
Czech name
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Czech description
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Project
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Continuities
I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Publication year
2019
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

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