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- Title
On the Long-Run Growth Effects of a Minimum Wage for a Two-Sector Economy.
- Authors
Sgro, Pasquale M.; Takayama, Akira
- Abstract
This paper investigates the effect of (nationally enforced) minimum wage regulation on economic growth using the standard two-sector model. The paper shows, inter alia, that the minimum wage regulation (i. fit is effective) always lowers the rate of growth by inducing 'over-capitalization' in the economy, and that a minimum wage floor which is sufficiently high causes the economy to decay continually. A diagrammatical exposition of some of the results is also provided.
- Subjects
MINIMUM wage; ECONOMIC development
- Publication
Economic Record, 1981, Vol 57, Issue 157, p180
- ISSN
0013-0249
- Publication type
Article
- DOI
10.1111/j.1475-4932.1981.tb01049.x