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A Comment on "Labor Markets, Unemployment, and Minimum Wages: A New View."

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  • Chung-cheng Lin

    (Institute of Economics, Academia Sinica)

Abstract

Palley (1995) recently built a job-hour model to provide us with a new view regarding the reason for unemployment and the positive employment effect of a minimum wage hike. This paper points out some difficulties with his explanation of his paper's findings and tries to provide an alternative explanation.

Suggested Citation

  • Chung-cheng Lin, 2001. "A Comment on "Labor Markets, Unemployment, and Minimum Wages: A New View."," Eastern Economic Journal, Eastern Economic Association, vol. 27(1), pages 71-82, Winter.
    • Handle: RePEc:eej:eeconj:v:27:y:2001:i:1:p:71-82
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    References listed on IDEAS

    as
    1. Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-793, September.
    2. Kim, Taeil & Taylor, Lowell J, 1995. "The Employment Effect in Retail Trade of California's 1988 Minimum Wage Increase," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 175-182, April.
    3. Thomas I. Palley, 1995. "Labor Markets, Unemployment, and Minimum Wages: A New View," Eastern Economic Journal, Eastern Economic Association, vol. 21(3), pages 319-326, Summer.
    4. Dickens, William T & Lundberg, Shelly J, 1993. "Hours Restrictions and Labor Supply," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(1), pages 169-192, February.
    5. Kinoshita, Tomio, 1987. "Working Hours and Hedonic Wages in the Market Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 95(6), pages 1262-1277, December.
    6. Deere, Donald & Murphy, Kevin M & Welch, Finis, 1995. "Employment and the 1990-1991 Minimum-Wage Hike," American Economic Review, American Economic Association, vol. 85(2), pages 232-237, May.
    7. Dickens, Richard & Machin, Stephen & Manning, Alan, 1999. "The Effects of Minimum Wages on Employment: Theory and Evidence from Britain," Journal of Labor Economics, University of Chicago Press, vol. 17(1), pages 1-22, January.
    8. Baker, Michael & Benjamin, Dwayne & Stanger, Shuchita, 1999. "The Highs and Lows of the Minimum Wage Effect: A Time-Series Cross-Section Study of the Canadian Law," Journal of Labor Economics, University of Chicago Press, vol. 17(2), pages 318-350, April.
    9. Alan Manning, 1995. "How Do We Know That Real Wages Are Too High?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(4), pages 1111-1125.
    10. Leslie, Derek, 1984. "The Productivity of Hours in U.S. Manufacturing Industries," The Review of Economics and Statistics, MIT Press, vol. 66(3), pages 486-490, August.
    11. Rebitzer, James B. & Taylor, Lowell J., 1995. "The consequences of minimum wage laws Some new theoretical ideas," Journal of Public Economics, Elsevier, vol. 56(2), pages 245-255, February.
    12. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    13. Bhaskar, V & To, Ted, 1999. "Minimum Wages for Ronald McDonald Monopsonies: A Theory of Monopsonistic Competition," Economic Journal, Royal Economic Society, vol. 109(455), pages 190-203, April.
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    More about this item

    Keywords

    Employment; Unemployment; Wage;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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