The various channels through which a reduction in the cost of offshoring can improve wages in a developed country are by now well understood. But does a similar reduction in the offshoring cost also benefit workers in the world's factories in developing countries? Using a parsimonious...

This paper develops a model in which workers to a certain extent enjoy working. We examine the implications of workers intrinsic motivation for optimal monetary incentive schemes. We show that motivated workers work harder and, for a given level of e.ort, are willing to work for a lower wage....

For two different regulatory standards, we examine the optimal minimum wage in a competitive labour market when the government is uncertain about supply and demand. Solutions are related to underlying supply and demand conditions, and the extent of uncertainty and of rationing efficiency. We...

We analyze the redistributive (dis)advantages of a minimum wage over income taxation in competitive labor markets. A minimum wage causes more unemployment, but also leads to more skill formation as unemployment is concentrated on low-skilled workers. A simple condition based on three sufficient...

The literature on macroeconomic agent-based models (MABMs) has gained growing attention since the early 2000s. Most MABMs dealing with market regulations have been focusing on the financial market. In contrast, only a small number of MABMs investigate the effects of labor market regulations. In...

This paper estimates the importance of the political and ideological position of the ruling party in determining the minimum wage in the European Union Member States. To this end, a database that establishes the position of each government in each country and year is built. Using the panel data...