This paper studies the interactions between the structure of product demand, relative wages, and the allocation of economic activity across two sectors. The agrarian sector produces a homogeneous good and consists of informal firms employing adults and children. The modern sector produces a...

Using information from all IMF conditionality programs from 1990 to 2018, we implement a dynamic Augmented Inverse Probability Weighting Regression Adjustment approach to examine the effects of programs, including public sector dismissals, on the size of the shadow economy. The estimated effect...

The paper examines the effects of the age-differentiated decreases in the minimum wage which Greece implemented in 2012, and which involved the introduction of a subminimum wage as a result of the reduction of the minimum wage by 22% for workers aged 25 and above, and by 32% for those aged less...

We explain the public’s support for the minimum wage (MW) institution despite economists’ warnings that the MW is a “blunt instrument” for redistribution. To do so we build a model in which workers are heterogeneous in ability, and the government engages in redistribution through the...

Using an intertemporal model of saving and capital accumulation we demonstrate that it is impossible for any binding minimum wage to increase the after-tax incomes of workers if the production function is Cobb-Douglas with constant returns to scale, or if there are no differences in ability...

In this paper we estimate disaggregated labour demand equations using panel data involving observations across time (1970-2007) for twenty-three industries across eleven euro area countries. By using the EU KLEMS database, which provides data across countries, we provide industry-by-industry...

This paper analyzes long run outcomes resulting from adopting a binding minimum wage in a neoclassical model with perfectly competitive labour markets and capital accumulation. The model distinguishes between workers of heterogeneous ability and capitalists who do all the saving, and it entails...

To many economists the public’s support for the minimum wage (MW) institution is puzzling, since the MW is considered a “blunt instrument” for redistribution. To delve deeper in this issue we build models in which workers are heterogeneous in ability. In the first model, the government...

Using an intertemporal model of saving and capital accumulation with two types of agents (workers and capitalists) we demonstrate that it is impossible for any binding minimum wage to increase the after-tax incomes of workers if the production function is Cobb-Douglas with constant returns to...

The paper examines the effects of the age-differentiated decreases in the minimum wage which Greece implemented in 2012, and which involved the introduction of a subminimum wage as a result of the reduction of the minimum wage by 22% for workers aged 25 and above, and by 32% for those aged less...