Skip to main content
Article
Minimum wage laws: What does an employment increase imply about output and welfare?
Faculty Publications
  • Thomas J. Carter, University of South Florida St. Petersburg
SelectedWorks Author Profiles:

Thomas J. Carter

Document Type
Article
Publication Date
1998
Disciplines
Abstract
Card and Krueger find empirically that minimum wage laws may increase employment. The current paper seeks the analytical implications of employment-increasing minimum wages for output and welfare. The standard supply and demand model cannot be used for this purpose. One needs a model in which employment-increasing minimum wages are at least possible, such as this paper's efficiency wage model. Here, an employment increase is neither necessary nor sufficient for expected welfare gains for either employed or unemployed workers. An employment-increasing minimum wage raises output but unambiguously lowers labor force participation and hurts those who remain unemployed.
Comments

Citation only. Full-text article is available through licensed access provided by the publisher. Members of the USF System may access the full-text of the article through the authenticated link provided.

Publisher
Elsevier
Creative Commons License
Creative Commons Attribution-Noncommercial-No Derivative Works 4.0
Citation Information
Carter, T. J. (1998). Minimum wage laws: What does an employment increase imply about output and welfare? Journal of Economic Behavior & Organization, 36, 473-485. doi: 10.1016/S0167-2681(98)00107-3