We consider an economy with a tax on all labor earnings. We discover that a slightly binding minimum wage on one sector can enhance efficiency. The minimum wage attracts high-reservation wage workers into the minimum-wage sector. If the labor demand curve in the free sector is quite flat, the...

In this paper we provide a simple diagrammatic technique of incorporating variable labor supply into the specific factors model. We then use the framework to analyze the positive and normative effects of a minimum wage both with a broadly based employment lottery (on-the-job search) and with an...

In this paper, we calculate the real rate of return from purchasing the S&P 500 index from 1871 through 2001. We assume the investor purchases the index in January of each year and holds it forever, consuming dividends, but never selling the index itself or else selling it after its present...

We examine the major interest groups in the debate over allowing the re-importation of prescription drugs by utilizing a logit model and instrumental variables. Consistent with political support approach, the evidence suggests that Representatives are maximizing their electoral prospects:...