We show that a minimum wage introduced in the presence of asymmetric information about worker productivities will lead to lower unemployment levels than predicted by the standard labour market model with heterogeneous labour and symmetric information.

Demographic change will be one of the most challenging issues for industrialized economies in the decades to come. In this paper, we focus on the impact of demographic change on labour markets. By setting up a stylized model of a regional labour market, we are able to analyze the interaction of...