Employment Differentiation, Minimum Wages and Firm Exit

The economic literature acknowledges that labor markets can often be described by monopsonistic competition. In such a structure, employers have market power and in the long run, zero profits due to the free entry and exit of firms. This article builds a model to analyze the role of minimum wages wh...

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Autores:
Vallejo, Hernán
Tipo de recurso:
Work document
Fecha de publicación:
2021
Institución:
Universidad de los Andes
Repositorio:
Séneca: repositorio Uniandes
Idioma:
eng
OAI Identifier:
oai:repositorio.uniandes.edu.co:1992/49604
Acceso en línea:
http://hdl.handle.net/1992/49604
Palabra clave:
Employment differentiation
Residual supply
Firm exit
Minimum wage
D21, J21, J31
Rights
openAccess
License
http://creativecommons.org/licenses/by-nc-nd/4.0/
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spelling Al consultar y hacer uso de este recurso, está aceptando las condiciones de uso establecidas por los autores.http://creativecommons.org/licenses/by-nc-nd/4.0/info:eu-repo/semantics/openAccesshttp://purl.org/coar/access_right/c_abf2Vallejo, Hernáne98cb662-0ce8-4263-a131-7988188d6c714002021-03-26T14:28:22Z2021-03-26T14:28:22Z2021http://hdl.handle.net/1992/496041657-719110.57784/1992/49604instname:Universidad de los Andesreponame:Repositorio Institucional Sénecarepourl:https://repositorio.uniandes.edu.co/The economic literature acknowledges that labor markets can often be described by monopsonistic competition. In such a structure, employers have market power and in the long run, zero profits due to the free entry and exit of firms. This article builds a model to analyze the role of minimum wages when employment is differentiated. It shows that first best and second best minimum wages can increase employment and improve efficiency by reducing market power, at the expense of having firm exit, higher concentration among employers, and less employment variety. As such, this article can provide insights on the higher firm exit rates observed among new, small and lower productivity firms.21 páginasengUniversidad de los Andes, Facultad de Economía, CEDEDocumentos CEDE No. 14 Marzo de 2021https://ideas.repec.org/p/col/000089/019141.htmlEmployment Differentiation, Minimum Wages and Firm ExitDocumento de trabajoinfo:eu-repo/semantics/workingPaperhttp://purl.org/coar/resource_type/c_8042http://purl.org/coar/version/c_970fb48d4fbd8a85Texthttps://purl.org/redcol/resource_type/WPEmployment differentiationResidual supplyFirm exitMinimum wageD21, J21, J31Facultad de EconomíaPublicationTHUMBNAILdcede2021-14.pdf.jpgdcede2021-14.pdf.jpgIM Thumbnailimage/jpeg15715https://repositorio.uniandes.edu.co/bitstreams/06dec198-96b3-4961-8123-e79e1b152e8b/download920e7207c3137835f37067cc2ca53e4cMD55ORIGINALdcede2021-14.pdfdcede2021-14.pdfapplication/pdf8938728https://repositorio.uniandes.edu.co/bitstreams/f5f6eb00-7d94-48b7-9f44-5e30a1cb1d5d/download6a9068a8814b9b35fe85649b28c07bc1MD51TEXTdcede2021-14.pdf.txtdcede2021-14.pdf.txtExtracted texttext/plain21477https://repositorio.uniandes.edu.co/bitstreams/8625720e-f4de-4e7b-ad05-c338028b8f6b/download2b756e351e6ccad111c0b5956745291bMD541992/49604oai:repositorio.uniandes.edu.co:1992/496042024-06-04 15:30:29.051http://creativecommons.org/licenses/by-nc-nd/4.0/open.accesshttps://repositorio.uniandes.edu.coRepositorio institucional Sénecaadminrepositorio@uniandes.edu.co
dc.title.none.fl_str_mv Employment Differentiation, Minimum Wages and Firm Exit
title Employment Differentiation, Minimum Wages and Firm Exit
spellingShingle Employment Differentiation, Minimum Wages and Firm Exit
Employment differentiation
Residual supply
Firm exit
Minimum wage
D21, J21, J31
title_short Employment Differentiation, Minimum Wages and Firm Exit
title_full Employment Differentiation, Minimum Wages and Firm Exit
title_fullStr Employment Differentiation, Minimum Wages and Firm Exit
title_full_unstemmed Employment Differentiation, Minimum Wages and Firm Exit
title_sort Employment Differentiation, Minimum Wages and Firm Exit
dc.creator.fl_str_mv Vallejo, Hernán
dc.contributor.author.none.fl_str_mv Vallejo, Hernán
dc.subject.keyword.none.fl_str_mv Employment differentiation
Residual supply
Firm exit
Minimum wage
topic Employment differentiation
Residual supply
Firm exit
Minimum wage
D21, J21, J31
dc.subject.jel.none.fl_str_mv D21, J21, J31
description The economic literature acknowledges that labor markets can often be described by monopsonistic competition. In such a structure, employers have market power and in the long run, zero profits due to the free entry and exit of firms. This article builds a model to analyze the role of minimum wages when employment is differentiated. It shows that first best and second best minimum wages can increase employment and improve efficiency by reducing market power, at the expense of having firm exit, higher concentration among employers, and less employment variety. As such, this article can provide insights on the higher firm exit rates observed among new, small and lower productivity firms.
publishDate 2021
dc.date.accessioned.none.fl_str_mv 2021-03-26T14:28:22Z
dc.date.available.none.fl_str_mv 2021-03-26T14:28:22Z
dc.date.issued.none.fl_str_mv 2021
dc.type.spa.fl_str_mv Documento de trabajo
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dc.identifier.doi.none.fl_str_mv 10.57784/1992/49604
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dc.language.iso.none.fl_str_mv eng
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dc.relation.ispartofseries.none.fl_str_mv Documentos CEDE No. 14 Marzo de 2021
dc.relation.repec.spa.fl_str_mv https://ideas.repec.org/p/col/000089/019141.html
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eu_rights_str_mv openAccess
dc.format.extent.none.fl_str_mv 21 páginas
dc.publisher.none.fl_str_mv Universidad de los Andes, Facultad de Economía, CEDE
publisher.none.fl_str_mv Universidad de los Andes, Facultad de Economía, CEDE
institution Universidad de los Andes
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