This paper studies the effects of the minimum wage on the life cycle of firms. We first build a tractable model where heterogeneous firms have labor market power, invest in innovation, and choose formal or informal sectors. The model predicts that a minimum wage hike not only shrinks young and...

This paper provides evidence that finishing school when labour markets are weak leads to poor subsequent labour market prospects, particularly those leaving school at younger ages. Using administrative register data from Denmark, we find that these scarring effects are larger and more persistent...