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Minimum wages, human capital, employment and growth

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  • Ragacs, Christian

Abstract

This paper deals with the effects of minimum wages on human capital accumulation, and steady state employment and growth. The minimum wage is introduced in a model of endogenous growth driven by human capital accumulation. Unemployed agents maximize utility given the information that they are unemployed facing changed budget constraints. This situation is implemented in a "non-market-clearing equilibrium" framework. We show that the steady state rate of growth is not affected by the minimum wage and that in the steady state the system yields full employment. These effects are generated by intertemporal adjustments of the employed households who re-act to the relatively higher minimum wage which increases skills accumulation. (author's abstract)

Suggested Citation

  • Ragacs, Christian, 2002. "Minimum wages, human capital, employment and growth," Department of Economics Working Paper Series 81, WU Vienna University of Economics and Business.
    • Handle: RePEc:wiw:wus005:224
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    Cited by:

    1. Rocha-Akis, Silvia, 2006. "Labour tax policies and strategic offshoring under unionised oligopoly," Department of Economics Working Paper Series 99, WU Vienna University of Economics and Business.
    2. Gerlinde Fellner & Matthias Sutter, 2009. "Causes, Consequences, and Cures of Myopic Loss Aversion – An Experimental Investigation," Economic Journal, Royal Economic Society, vol. 119(537), pages 900-916, April.
    3. Eckhard Hein, 2010. "Shareholder Value Orientation, Distribution And Growth—Short‐ And Medium‐Run Effects In A Kaleckian Model," Metroeconomica, Wiley Blackwell, vol. 61(2), pages 302-332, May.
    4. Hagemann, Harald, 2010. "L. Albert Hahn's Economic Theory of Bank Credit," Department of Economics Working Paper Series 134, WU Vienna University of Economics and Business.
    5. Theresa Grafeneder-Weissteiner & Klaus Prettner, 2009. "Agglomeration and population ageing in a two region model of exogenous growth," VID Working Papers 0901, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna.
    6. Engelbert Stockhammer & Paul Ramskogler, 2009. "Post-Keynesian economics How to move forward," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 6(2), pages 227-246.
    7. Theresa Grafeneder-Weissteiner, 2010. "Demographic change, growth and agglomeration," Department of Economics Working Papers wuwp132, Vienna University of Economics and Business, Department of Economics.
    8. Engelbert Stockhammer & Paul Ramskogler, 2008. "Uncertainty and Exploitation in History," Journal of Economic Issues, Taylor & Francis Journals, vol. 42(1), pages 175-194, March.
    9. Grafeneder-Weissteiner, Theresa & Prettner, Klaus, 2010. "Agglomeration processes in aging societies," Department of Economics Working Paper Series 131, WU Vienna University of Economics and Business.
    10. Badinger, Harald & Kubin, Ingrid, 2007. "Vom kurzfristigen zum mittelfristigen Gleichgewicht in einer offenen Volkswirtschaft unter fixen und flexiblen Wechselkursen," Department of Economics Working Paper Series 101, WU Vienna University of Economics and Business.
    11. Pasquale Commendatore & Ingrid Kubin & Carmelo Petraglia, 2009. "Footloose Capital and Productive Public Services," Chapters, in: Neri Salvadori & Pasquale Commendatore & Massimo Tamberi (ed.), Geography, Structural Change and Economic Development, chapter 1, Edward Elgar Publishing.
    12. Riedl, Aleksandra & Rocha-Akis, Silvia, 2007. "Testing the tax competition theory: How elastic are national tax bases in western Europe?," Department of Economics Working Paper Series 112, WU Vienna University of Economics and Business.
    13. Engelbert Stockhammer & Lucas Grafl, 2010. "Financial Uncertainty and Business Investment," Review of Political Economy, Taylor & Francis Journals, vol. 22(4), pages 551-568.
    14. Grandner, Thomas, 2007. "Product differentiation in a linear city and wage bargaining," Department of Economics Working Paper Series 109, WU Vienna University of Economics and Business.
    15. Paul Ramskogler, 2007. "Uncertainty, market power and credit rationing," Department of Economics Working Papers wuwp105, Vienna University of Economics and Business, Department of Economics.
    16. Steidl, Annemarie & Stockhammer, Engelbert, 2007. "Coming and leaving. Internal mobility in late Imperial Austria," Department of Economics Working Paper Series 107, WU Vienna University of Economics and Business.
    17. Özlem Onaran, 2007. "International financial markets and fragility in the Eastern Europe: "can it happen" here?," Department of Economics Working Papers wuwp108, Vienna University of Economics and Business, Department of Economics.
    18. Martin Currie & Ingrid Kubin, 2005. "Fixed Price Dynamics versus Flexible Price Dynamics," Department of Economics Working Papers wuwp089, Vienna University of Economics and Business, Department of Economics.
    19. Grafeneder-Weissteiner, Theresa, 2010. "Demographic change, growth and agglomeration," Department of Economics Working Paper Series 132, WU Vienna University of Economics and Business.
    20. Smet, Koen, 2007. "Stuck in the middle? The structure of trade between South Africa and its major trading partners," Department of Economics Working Paper Series 115, WU Vienna University of Economics and Business.
    21. Christian Ragacs, 2003. "On the Empirics of Minimum Wages and Employment: Stylized Facts for The Austrian Industry," Working Papers geewp24, Vienna University of Economics and Business Research Group: Growth and Employment in Europe: Sustainability and Competitiveness.
    22. Figerl, Jürgen & Grandner, Thomas, 2008. "Job quality and wages in duopsony," Department of Economics Working Paper Series 121, WU Vienna University of Economics and Business.

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