We analyze the redistributional (dis)advantages of a minimum wage over income taxation in competitive labor markets, without imposing assumptions on the (in)efficiency of labor rationing. Compared to a distributionally equivalent tax change, a minimum-wage increase raises involuntary...

I consider the case for the minimum wage alongside (optimal) income taxes when workers differ in both wages and working hours, such that a given level of income corresponds to multiple wage rates. The minimum wage is directly targeted at the lowest-wage workers, while income taxes are at most...

This paper develops a model in which workers are heterogeneous in their intrinsic motivation to work at a firm. We characterise optimal incentive schemes and examine how the firm can attract and select highly motivated workers to fill a vacancy when workers’ motivation is private information....

I apply Ricardo’s principle of comparative advantage to a theory of factor substitutability in a model with a continuum of worker and job types. Highly skilled workers have a comparative advantage in complex jobs. The model satisfies the distance-dependent elasticity of substitution (DIDES)...

We examine economic vulnerability to illness when, as for informal sector workers in Thailand, there is universal coverage for health care but earnings losses are uninsured. Even with comprehensive health care entitlement, severe illness that strikes an initially healthy worker is found to raise...

In a Mirrleesian environment, a monopsonist sets hourly wages and individuals choose how many hours to work. Labor market outcomes do not only depend on the level and slope of the income tax function, but also on its curvature. A more concave tax schedule raises the elasticity of labor supply,...

China's Industrial Transfer Policy (ITP) is a novel place-based development policy of unprecedented scale. The policy targets a set of inland cities aiming to i) grow them in size and ii) restructure them into manufacturing hubs. These cities would eventually relieve pressure in China's coastal...

While the employment effects of minimum wages are usually reported to be small (suggesting low substitutability between skill types), direct estimates suggest a much larger degree of substitutability. This paper argues that this paradox is largely due to a bias induced by the aggregation of...

There has been much attention for the causes of the increase in wageinequality in the United States since the mid seventies. DiNardo,Fortin, and Lemieux (1996) showed that minimum wages can explain 25%. The present paper uses a more general approach requiring noassumptions on how minimum wages...