DP950 Searching for the Virtues of the European Model

Author(s):	Gilles Saint-Paul
Publication Date:	May 1994
Keyword(s):	Labour Market Flexibility, Minimum Wage, Unemployment
JEL(s):	E24, E6
Programme Areas:	International Macroeconomics, Human Resources
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=950

The distributional effects of the minimum wage are analysed in a model where skilled and unskilled labour enter the production function. It is argued that distributional goals are best achieved by letting the labour market clear and achieving redistribution through taxes and transfers.