In this paper, we derive conditions under which a minimum-wage law combined with anonymous taxes and transfers and an agent-specific tax-transfer scheme are equivalent policies.
JEL classification: E62, H21
Key words: redistribution policy, minimum wage, tax-transfer scheme, equivalence result
Financial support from Fundación Ramón Areces and 9/UPV 00035.321-13511/2001 is acknowledged. The views expressed here are the authors’ and not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System. Any remaining errors are the authors’ responsibility.
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