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market_power_and_efficiency_LSERO.pdf
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🔗 Source: philippkircher.com
📊 Size: 314 KB
👤 Author: LSE
⬇️ Downloads: 92

Summary

Manolis Galenianos, Philipp Kircher, and Gabor Virag study the welfare effects and policy implications of firms' market power in a frictional labor market. They find that the decentralized equilibrium is inefficient, with firms' market power causing the misallocation of workers from high- to low-productivity firms. A minimum wage exacerbates inefficiencies, while moderate unemployment benefits can increase welfare by limiting firms' market power. The model shows that evaluating labor market policy based on employment effects alone can lead to misleading results, as both minimum wages and unemployment benefits redistribute surplus towards workers but have opposing effects on aggregate welfare.

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Description

Manolis Galenianos, Philipp Kircher, and Gabor Virag study the welfare effects and policy implications of firms' market power in a frictional labor market.

Technical Information

  • File Format: PDF
  • File Size: 314 KB
  • Pages: 27
  • Language: EN
  • Author: LSE
  • Total Downloads: 92
  • Last Updated: 4 days ago

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