@TechReport{iza:izadps:dp806,
            	author={Berg, Gerard J. van den},
            	title={Multiple Equilibria and Minimum Wages in Labor Markets with Informational Frictions and Heterogeneous Production Technologies},
            	year={2003},
	month={Jun},
            	institution={Institute of Labor Economics (IZA)},
            	address={Bonn},
            	type={IZA Discussion Paper},
            	number={806},
            	url={https://www.iza.org/index.php/publications/dp806},
	abstract={It is often argued that a mandatory minimum wage is binding only if the wage density displays
a spike at it. In this paper we analyze a model with search frictions and heterogeneous
production technologies, in which imposition of a minimum wage affects wages even though,
after imposition, the lowest wage in the market exceeds the minimum wage. The model has
multiple equilibria as a result of the fact that the reservation wage of the unemployed and the
lowest production technology in use affect each other. Imposition of a minimum wage may
improve social welfare.},
	keywords={matching;productivity;job search;unemployment;imperfect information;equilibrium;labor market policy;wages;congestion},
            }