minimum wage causes more unemployment, but also leads to more skill formation as unemployment is concentrated on low … gains of more skill formation outweigh the social welfare losses of increased unemployment. Using a highly conservative …

unemployment benefits; we find that the MW is preferred by the majority of workers (even when the unemployed receive very generous … unemployment benefits). In the second model, the government engages in redistribution through the public provision of private goods … given generosity of the unemployment benefit scheme, the maximum, politically viable, MW is lower than in the absence of in …