tag:blogger.com,1999:blog-2830084253401570472.post4162937626051349883..comments2024-03-28T09:22:36.967+13:00Comments on Offsetting Behaviour: Minimum wages and the second bestEric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-2830084253401570472.post-21032400405627236742010-02-11T13:24:20.259+13:002010-02-11T13:24:20.259+13:00Sure. The "monopsony can make min wages good...Sure. The "monopsony can make min wages good" argument isn't new or terribly controversial; it's rather that, outside of a company town with a high wall around it keeping folks from leaving, it doesn't much apply...Eric Cramptonhttps://www.blogger.com/profile/15831696523324469713noreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-80140483614173076322010-02-11T13:04:00.093+13:002010-02-11T13:04:00.093+13:00I agree - I haven't had time to read that pape...I agree - I haven't had time to read that paper yet, but I thought it may be interesting to readers.Samuel Konkinhttps://www.blogger.com/profile/00821513835134996401noreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-21554758681035152402010-02-10T22:42:35.693+13:002010-02-10T22:42:35.693+13:00@Sam: In theory, with monopsony minimum wages can ...@Sam: In theory, with monopsony minimum wages can have neutral or positive effects, yes. But we hardly have monopsonistic labour market, do we?Eric Cramptonhttps://www.blogger.com/profile/15831696523324469713noreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-52408354358060022982010-02-10T22:24:04.096+13:002010-02-10T22:24:04.096+13:00I have heard this argument made before. I haven...I have heard this argument made before. I haven't yet had time to look into it, but is there an argument to be made that a minimum wage reduces search costs (i.e., you know you'll get paid x if you get a job, so takes that informational uncertainty out of it), and so encourages people to find jobs? That doesn't seem right to me, as it increases the search cost elsewhere by prolonging periods of unemployment. <br /><br />On the monopsony assumption, see: http://www.nber.org/papers/w4742<br /><br />To quote:<br /><br />"We present a general theoretical model whereby employers have some degree of monopsony power, which allows minimum wages to have the conventional negative impact on employment but which also allows for a neutral or positive impact."Samuel Konkinhttps://www.blogger.com/profile/00821513835134996401noreply@blogger.com