cost savings increased employment of minimum wage workers more than firms that received smaller labor cost savings. Our … industry. The fact that a large portion of retail employees had contracted wages near the negotiated minimum wage levels at the … time of the reform suggests that the minimum wage levels were binding to a great extent. We also find that retail firms …

In equilibrium models of unemployment, e.g., efficiency wage models, the level of unemployment generally depends on the … employees while the latter is a tax on the cost of labor to firms. Pisauro (1991) has shown in a short-run efficiency wage model … wage restraint than payroll taxes. Extending his model to the long run by allowing for free entry and exit of firms, we go …

as employment taxes or payroll taxes, for given tax revenue. Turning to non-competitive labor market models, like wage … bargaining of efficiency wage models, the two taxes cease to be equivalent in the sense that balanced-budget substitutions of one … equilibrium employment in the wage bargaining model, it may lead to a lower level of equilibrium employment in the efficiency wage …