128093 20241125101159.0 doi 10.1016/j.eap.2023.08.009 sideral 135255 ART-2023-135255 eng Medrano-Adán, Luis Do minimum wages deliver what they promise? Effects of minimum wage on employment, output, and income inequality from occupational choice theory 2023 Access copy available to the general public Unrestricted This paper addresses the unresolved debate on the effects of minimum wages on output, employment, and income inequality by modeling an occupational choice economy calibrated for a representative OECD economy. The minimum wage sets a minimum skill requirement for employees, which reduces the effective labor supply and raises its price. Consequently, salaries increase, business profits fall, and some entrepreneurs transition to solo self-employment. With a minimum-to-average wage ratio of 0.43 (the OECD countries average in 2020), a 10% increase in the minimum wage reduces output, employment, and inequality among employees by 0.2%, 1.0%, and 2.1%, respectively, and increases total income inequality by 0.57%. If the minimum-to-average wage ratio were 0.55, output, employment, and inequality among employees would decrease by 0.87%, 3.55%, and 5.19%, respectively, and income inequality would rise by 2.09%. In summary, the effects are mainly negative, contrary to what is promised, and quantitatively large for high minimum-to-average wage ratios. info:eu-repo/semantics/openAccess by-nc-nd http://creativecommons.org/licenses/by-nc-nd/3.0/es/ 7.9 2023 ECONOMICS 11 / 600 = 0.018 2023 Q1 T1 1.597 2023 Economics, Econometrics and Finance (miscellaneous) 2023 Q1 Economics and Econometrics 2023 Q1 9.8 2023 info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion Salas-Fumás, Vicente Universidad de Zaragoza (orcid)0000-0001-8405-1056 4012 650 Universidad de Zaragoza Dpto. Direcc.Organiza.Empresas Área Organización de Empresas 80 (2023), 366-383 Economic Analysis and Policy 0313-5926 851308 http://zaguan.unizar.es/record/128093/files/texto_completo.pdf Versión publicada 2187980 http://zaguan.unizar.es/record/128093/files/texto_completo.jpg?subformat=icon icon Versión publicada oai:zaguan.unizar.es:128093 articulos driver 2024-11-22-12:10:56 ARTICLE