Estimados Académicos y Académicas FEN,

Les extendemos la invitación al seminario que organiza el Departamento de Economía, en el que se presentará el trabajo titulado "Minimum wages and optimal redistribution: The role of firm profits".

Expone: Damian Vergara, Princeton.

Abstract: This paper analyzes the minimum wage as a redistributive tool. Empirically, I find that the average US state-level minimum wage increase in the 1997-2019 period raised low-skill workers’ earnings at the expense of firm profits. Motivated by this fact, I characterize the desirability of the minimum wage in a setting with firm profits and optimal corporate and labor income taxes and transfers, considering both a stylized neoclassical labor market and a directed search model of the labor market. I show that a minimum wage is superfluous when the corporate tax is non-distortionary. A binding minimum wage is desirable, however, when it redistributes profits more efficiently than the corporate tax. This state of affairs prevails in two empirically plausible scenarios: when capital mobility keeps corporate taxes low and when firms capture low-wage income subsidies such as the Earned Income Tax Credit

El formato será presencial y el seminario se desarrollará en la Sala P-304.

Saludos cordiales,

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